Shop prices were lower in February when compared with last year, as cheaper non-food items offset the impact of costlier food products, but inflation is expected to pick up over the course of 2025.

According to the British Retail Consortium and NielsenIQ Shop Price Index for last month, shop price deflation was unchanged at an annual rate of -0.7%.

Non-food deflation accelerated to a year-on-year rate of -2.1% following a 1.8% decline in prices in January, though annual food inflation rose to 2.1% from 1.6%.

Nevertheless, when compared with the month before, shop prices actually increased by 0.4%, with both food and non-food prices rising, marking the biggest increase over the past year.

“Breakfast, in particular, got more expensive as butter, cheese, eggs, bread and cereals all saw price hikes. Climbing global coffee prices could threaten to push the morning costs higher in the coming months,” said Helen Dickinson, chief executive of the BRC.

“In non-food, month on month prices rose as January Sales promotions ended, especially in electricals and furniture. But discounting is still widespread in fashion as retailers tried to entice customers against a backdrop of weak demand.”

Dickinson said inflation is expected to rise “across the board” in 2025 on the back of geopolitical tensions, the impact of changes to national insurance and minimum wage, along with the packaging levy.

“If Government wants to keep inflation at bay, enable retailers to focus on growth, and help households, it must mitigate the swathe of costs facing the industry. It can start by ensuring no shop ends up paying more than they already do under the new business rates proposals, and delaying the new packaging taxes,” she said.