Household expenditure on food and non-alcoholic beverages

Real household expenditure on food and non-alcoholic beverages is estimated to have declined at a compound annual rate of 0.9% over the five years through 2026-27, reaching £139.6 billion. The period opened with a surge in nominal food spending driven by the post-pandemic food inflationary wave. UK food inflation hit peaks of 10.9% in 2022 and 14.6% in 2023, driven by the energy crisis in Europe and higher costs from post-Brexit agri-food import regulations under the EU-UK trade agreement. Cumulatively, food and non-alcoholic drink prices rose 37% between January 2020 and July 2025, outpacing overall UK inflation of 28%, significantly eroding real volumes as consumers traded down to cheaper products.

Conditions began to ease in 2024, with food inflation falling sharply to 2.7% and real household food and drink spending recovering by 2.4% in 2023-24. However, inflation rebounded to 4.2% on average in 2025, driven by rising government regulatory costs, including the Extended Producer Responsibility (EPR) scheme, which emerged as a leading structural driver alongside lingering energy costs. Overall real household food and drink spending growth is projected to remain modest at 0.8% in 2026-27.