Key points
  • Shop price inflation was 0.9% year on year in July 2026, down from 1.2% in June.
  • Food inflation eased to 2.2% from 2.4%; non-food softened to 0.2% from 0.6%.
  • The BRC attributes the easing to heavy summer promotions, not to falling costs.
  • Electricals and health and beauty moved the other way, on rising semiconductor and manufacturing prices.
  • Data was collected between 1 and 7 July 2026, before the latest oil price movements.

The BRC-NIQ Shop Price Index recorded UK shop price inflation at 0.9% year on year in July 2026, down from 1.2% in June, as reported by Sharecast. Food inflation eased to 2.2% from 2.4%, and non-food inflation softened to 0.2% from 0.6%.

What the index measured

The index is published by the British Retail Consortium with NIQ. The July data was collected between 1 and 7 July 2026 — a point worth holding onto, since it means the figures predate movements in oil prices later in the month.

“Good news for households in July as shop price inflation slowed. Retailers competed hard to limit prices rises, with a wave of summer promotions across food and other goods.”

— Helen Dickinson, Chief Executive, British Retail Consortium

Reporting on the index attributes the easing to heavy summer promotional activity: World Cup-related deals on snacks and drinks, and clothing and footwear discounting as retailers cleared stock.

Worth knowing Discount-driven disinflation is not the same as costs coming down. When prices ease because retailers are promoting, the retailer is absorbing margin — the underlying input costs have not necessarily changed.

Two caveats that belong in any plan built on this

The easing is promotional, not structural

Helen Dickinson has flagged higher employment costs, packaging taxes, global instability and climate disruption as pressures still building on retailers. A promotional cycle ends. If input costs have continued to rise underneath the discounting, the gap reappears when the promotions stop.

Not every category moved the same way

Electricals and health and beauty moved in the opposite direction, on rising semiconductor and manufacturing prices. A headline index is an average across categories that are behaving differently. If your inputs sit in a category that rose, the headline number describes someone else's costs.

Why this shows up as a cash flow problem, not a profit problem

The planning risk in a story like this is straightforward: a business owner reads “inflation is falling”, relaxes, and holds prices flat into the next two quarters. If input costs then rise while selling prices stay put, the squeeze appears first in timing — money going out before money comes in — rather than in the annual profit figure.

A cash flow gap is the difference between when you pay suppliers and when customers pay you, and it widens when input costs rise faster than you reprice. Modelling that gap is a different exercise from forecasting profit:

  • Model input costs rising by a range — not a single figure — while your prices stay flat.
  • Include payment terms. A 60-day debtor and a 30-day supplier is a 30-day hole regardless of margin.
  • Check the months where the gap is widest, not the annual total.
  • Identify the point at which you would need to reprice, and decide it in advance rather than under pressure.

The other side of the argument

It would be one-sided to present the easing as purely cosmetic. Slower shop price inflation does genuinely reduce pressure on household budgets, which supports consumer demand — and for a business selling to consumers, that demand matters. Two consecutive months of easing also reduces the likelihood of further cost-of-living-driven demand contraction in the near term. The caution here is about planning assumptions, not about whether the number itself is good news.

These figures relate to the United Kingdom and are published by the British Retail Consortium with NIQ. They are an industry index, not official Office for National Statistics inflation data, and they measure shop prices rather than the wider Consumer Prices Index.

Common questions

What was UK shop price inflation in July 2026?

0.9% year on year, down from 1.2% in June, according to the BRC-NIQ Shop Price Index. Food inflation was 2.2% and non-food inflation was 0.2%.

Why did shop price inflation fall?

The British Retail Consortium attributes the easing to heavy summer promotional activity, including World Cup deals on snacks and drinks and discounting on clothing and footwear as retailers cleared stock — rather than to falling input costs.

Is the BRC index the same as the official inflation rate?

No. The BRC-NIQ Shop Price Index is an industry measure of shop prices published by the British Retail Consortium with NIQ. It is not the Office for National Statistics' Consumer Prices Index and covers a narrower basket.

Which categories saw prices rise?

Electricals and health and beauty moved in the opposite direction to the headline, on rising semiconductor and manufacturing prices.

What should a small business take from this data?

That easing driven by promotions is not the same as input costs falling. Planning on the assumption that costs have come down carries risk, particularly for businesses whose inputs sit in categories that rose.

In short

Shop price inflation eased to 0.9% in July 2026 on the back of heavy summer discounting, with food at 2.2% and non-food at 0.2%. The British Retail Consortium has flagged employment costs, packaging taxes and global instability as pressures still building. For a small business, the exposure created by a promotional easing is a cash flow timing problem rather than a profit one.

Based on reporting by Sharecast, 28 July 2026, on the BRC-NIQ Shop Price Index.

References