UK shop price inflation increased to 0.7% year-on-year in December 2025 as retailers across non-food categories, including fashion, continued to face shifting consumer demand and widespread promotions.
The latest figures from the British Retail Consortium (BRC) and NIQ showed non-food prices remained in deflation at -0.6% on an annual basis, consistent with both November and the three-month average.
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Retailers responded to cautious shopper sentiment by expanding offers and discounts, particularly in gifting categories such as clothing, toys, books and home entertainment.
British Retail Consortium chief executive Helen Dickinson said: “Shop price inflation edged up in December as food prices rose at a faster rate. Nonetheless, shoppers still found plenty of value across many Christmas essentials including vegetables, cheeses, and alcohol, helping households to enjoy the festive season. Promotions were also widespread across popular gifting categories, including toys, books, and home entertainment.
“This year, retailers will continue to do all they can to keep prices down. While falling energy prices and improved crop supply should help ease some cost pressures, increased public policy costs and regulation will likely keep inflation sticky. 2026 must be the year that Government works with business to create a policy environment that reduces the pressures bearing down on the industry. This will enable retailers to invest more in keeping their prices down, benefitting households all across the country.”
Shop price increases overall matched the three-month average of 0.7%.
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By GlobalDataFood inflation contributed more strongly at 3.3% in December 2025, from 3.0% in November, while fresh food rose 3.8%.
NIQ Retailer and Business Insight head Mike Watkins said: “This Christmas, shoppers remained cautious, prioritising affordability. Retailers worked hard to encourage spending by keeping supply chain price increases to a minimum, and many food retailers reduced prices in December to support demand. Looking ahead to 2026, although inflation has peaked, weak shopper sentiment is likely to persist, so shoppers will continue to seek out lower prices and promotional offers.”
In August last year, UK fashion industry leaders urged action on business rates ahead of the Autumn Budget, warning that rising retailer costs are pushing up prices for everyday families.
