As we enter into 2026, inflation rates are increasing as prices continued to edge up at the end of last year.
According to the British Retail Consortium, shop price inflation picked up to 0.7% year on year in December, against growth of 0.6% in November. This is in line with the 3-month average of 0.7%.
Non-food inflation decreased to 0.6% year on year in December, against a decline of 0.6% in November. This is in line with the 3-month average of 0.6%.
| Overall SPM | ||
| % Change | On last year | On last month |
| Dec-25 | 0.7 | 0.0 |
| Nov-25 | 0.6 | -0.1 |
Despite shop price inflation increasing slowly in December as prices rose at a faster rate, shoppers still found plenty of value across many Christmas essentials to enjoy the festive season.
Helen Dickinson, the BRC’s chief executive, said: “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.
This comes as Chancellor Rachel Reeves left retailers scratching their heads at some of the decisions announced in the Autumn Budget.
It was a mixed bag that offered relief for many shops, but brought in new costs for others. Retailers face a delicate balancing act as they strive to invest, hire, and keep prices affordable.
Dickinson continued: “2026 must be the year that our government works with businesses to create a policy environment that reduces the constant pressures bearing down on the industry.
“This will enable retailers to invest more in keeping their prices down, benefitting households all across the country.”
Mike Watkins, head of retailer and business insight at NIQ, added: “This Christmas, shoppers remained cautious, prioritising affordability.
“Retailers worked hard to encourage spending by keeping supply chain price increases to a minimum, and many 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.”
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