1st September 2026
For anyone who has been hoping that the worst of Britain's food-price problems are behind us, the latest figures from the British Retail Consortium provide an uncomfortable warning.
Food prices in Britain's shops rose by 2.8% over the year to August, up from 2.2% in July. At the same time, overall shop-price inflation accelerated from 0.9% to 1.5%, its highest rate for more than two years.
That does not sound anything like the double-digit food inflation experienced during the worst of the cost-of-living crisis.
But there is a danger in looking at the percentage without considering what it means.
A 2.8% increase today comes on top of all the increases that have already happened.
Food has not suddenly become only 2.8% more expensive than it was before the cost-of-living crisis. It is 2.8% more expensive than it was a year ago, when prices were already considerably higher than they had been several years earlier.
That distinction matters.
The supermarket trolley is telling a different story
The BRC's latest figures show that food inflation is now running above its three-month average of 2.5%.
Fresh food inflation was 3.0%, slightly lower than the 3.1% recorded in July.
But the more striking movement came in ambient food, where inflation jumped from 1.1% to 2.5%.
Ambient food includes the packaged, processed and longer-life products that can be stored without refrigeration.
The BRC says these products are particularly exposed to higher energy, input and commodity costs and are often imported and processed before reaching supermarket shelves.
That is important because it shows how an energy shock can eventually find its way into the weekly food shop.
It does not necessarily happen immediately.
The farmer, processor, transporter, warehouse and retailer can each absorb part of a cost increase for a while. But businesses cannot absorb rising costs indefinitely.
Eventually some of the increase reaches the consumer.
Why are prices starting to rise again?
The BRC points to a combination of higher energy, input and commodity costs.
Energy is particularly important.
Food production is energy intensive. Farmers use fuel and electricity. Food manufacturers need heat and refrigeration. Warehouses need electricity. Supermarkets have enormous refrigeration requirements. Trucks need fuel to move food around the country.
An increase in the cost of energy therefore has multiple opportunities to work its way through the food chain.
There is also the international dimension.
Britain imports a substantial proportion of the food and agricultural products it consumes, as well as many of the ingredients and materials used to produce food domestically.
A rise in global commodity prices, transport costs or exchange-rate movements can therefore affect British supermarket prices even when the product itself is produced in Britain.
The BRC's warning is essentially that retailers are now beginning to pass some of those rising costs on.
But this isn't 2022
It is important not to exaggerate the latest figures.
Britain is not currently experiencing the extraordinary food inflation seen during the 2022-23 period.
A 2.8% annual increase is uncomfortable, but it is nowhere near the rates that caused such severe pressure on household budgets during the energy and food crisis.
Nor does one month's increase prove that another major inflationary spiral has begun.
The BRC figures are a warning rather than proof of another crisis.
But they deserve attention because prices have begun moving in the wrong direction at a time when many household budgets have still not recovered from the previous shock.
The problem is the starting point
Imagine that a family's annual supermarket bill was £5,000 several years ago.
If food prices subsequently rose substantially, that family might now be spending considerably more simply to buy roughly the same quantity of food.
A new 2.8% annual increase is then being applied to the higher figure.
That is why inflation can feel much worse than the headline percentage suggests.
Inflation measures the rate at which prices are changing, not whether prices are affordable.
If prices stop rising, that does not mean they return to where they were.
It simply means the increase has stopped.
That is one of the most misunderstood aspects of the cost-of-living debate.
Rural Scotland faces an additional problem
There is another reason the latest figures deserve attention in places such as Caithness.
The national inflation figure does not necessarily describe the experience of every household.
Getting food to a supermarket in Wick or Thurso involves considerably more transport than getting it to a large urban distribution centre.
The cost of moving goods over long distances matters.
So does the scale of the local market.
A large supermarket in a major city may have enormous purchasing power and intense competition between several retailers. A smaller rural market has different economics.
That does not mean every product in Caithness will rise faster than the national average.
But it does mean that transport costs and limited competition can make it harder for rural consumers to escape increases in the underlying cost of getting goods to market.
For households already watching every pound, even relatively small increases can therefore matter.
Businesses are caught in the middle
The problem is not confined to consumers.
Retailers themselves are facing higher costs.
They have wages to pay, buildings to heat, refrigeration to operate, goods to transport and business rates and other charges to meet.
If retailers absorb every increase, their profit margins are squeezed.
If they pass the increases on, customers complain about rising prices.
That leaves retailers caught between two pressures.
The BRC is effectively warning that the ability of retailers to absorb higher costs is becoming increasingly limited.
For small independent retailers the problem can be even sharper.
A large supermarket may be able to negotiate a lower price from a supplier because of the volume it buys. A small shop in a rural community cannot necessarily do the same.
Yet the small shop is often providing an essential local service.
There is another cost-of-living squeeze approaching
The timing is also important.
Households are heading towards winter, when energy consumption normally rises.
Ofgem has already announced that the household energy price cap will rise by around 4% from October, taking the typical annual bill to about £1,723.
At the same time, fuel duty is beginning to rise again, adding another small cost to motorists from September.
None of these increases individually represents a financial catastrophe.
Together, however, they create the kind of background pressure that households notice.
A little more for fuel.
A little more for electricity.
A little more for the weekly shop.
A little more for insurance, services and other household expenses.
It is the accumulation that matters.
Could food inflation get worse?
There are reasons for caution.
Energy prices remain vulnerable to international events, while agricultural production can be affected by weather conditions.
The BRC has already pointed to higher commodity and input costs.
If those pressures persist, retailers may have to pass more of them through to consumers.
But there is also a reason not to assume the worst.
Retail competition remains strong. Supermarkets know that customers can switch brands, buy cheaper alternatives or shop around.
If underlying costs stabilise or fall, retailers will also have an incentive to compete for customers rather than simply maintain higher prices.
So the question is not whether food prices will suddenly explode again.
The more realistic question is whether the period of relatively modest food inflation is coming to an end.
What should we watch?
The next few months will tell us much more.
If food inflation remains around 2-3%, it would represent a persistent but manageable increase for many households.
If it begins moving towards 4%, 5% or higher, the situation becomes much more uncomfortable, particularly because household energy costs are also rising.
And if energy prices remain high, the pressure could spread beyond food.
That is why the BRC figures are worth watching even though the numbers themselves do not look dramatic.
They may be the beginning of another period when prices start creeping upwards faster than household incomes.
The danger of declaring victory too early
There is a tendency in political debate to declare the cost-of-living crisis over once inflation falls.
That is understandable but misleading.
The crisis was not simply about the rate at which prices increased.
It was about the level of prices people were left with after the increases had happened.
A household that has already had to cut back on food, heating, holidays or other spending does not suddenly become financially comfortable because inflation falls from 10% to 3%.
And if prices begin rising again, that household has even less room to absorb another squeeze.
That is why today's BRC figures should not be dismissed as just another monthly statistic.
They are a reminder that inflation can return in waves.
Britain may not be heading back to the extraordinary food-price increases of 2022.
But the latest figures suggest that the pressure has not disappeared.
For households in Caithness and elsewhere, the message is simple.
The cost-of-living crisis may have changed shape, but it has not necessarily gone away.