The ONS reported this week that Inflation continues to rise, with prices inflating by 3.8% in the last 12 months (ONS 17 September 2025).
When food inflation rises, grocery retailers must navigate reduced consumer spending on higher-margin non-essential items, forcing them to focus on lower-margin, higher-volume staples, and may see customers trading down to discount supermarkets or own-brand alternatives. This can lead to increased pressure on supermarket profits, as higher operating costs of fuel, labour, packaging and other costs are passed on, while consumers become more price-sensitive.
Impact on consumers
- Squeezed budgets, resulting in consumers having less disposable income.
- Shoppers shift from branded goods to cheaper own-brand alternatives and discount supermarkets.
Implications for retailers
- Lower profit margins for supermarkets as consumers buy fewer high-margin items and focus on lower-priced staples and value ranges.
- Retailers adapt by increasing their own-brand and value ranges, offering more loyalty card deals and focusing on everyday low prices.
- Supermarkets face rising costs from supply chain disruptions, higher fuel prices for transport and increased labour costs.
Impact on suppliers
- Suppliers need to recover increased costs in labour, packaging taxes and fuel.
This ‘perfect storm’ can lead to uncomfortable conversations between retailers and suppliers. Are your Account Teams ready for these conversations?
The British Brands Group provides a range of functional training to help you ensure that your customer teams are prepared for the conversations that will result from current pricing pressures. Courses cover Competition law and compliance, GSCOP and Trading with Amazon. All feature a strong commercial bias, being about both understanding and application in the trading world. This training is available as either face-to-face or online offerings.
The British Brands Group is also very open to discuss your specific needs, should you want to run an in-house course exclusively for your team. Feel free to contact us.