Food for thought: Labour government must act on Middle East conflict impacts, UK retailers warn

The British Retail Consortium (BRC) is calling on the UK government to act on soaring domestic policy costs, as new polling shows 80% of people fear the Middle East conflict will push up food prices.

It says that retailers are already absorbing significant additional costs from the conflict. Rising gas and electricity prices are pushing up production, shipping and distribution costs throughout the supply chain, with knock-on effects for fertiliser, manufacturing and logistics. While retailers will do everything they can to mitigate impacts on customers, those pressures will inevitably filter through to the till over the coming months. 

But the situation in the Gulf is only part of the picture. Over the past two years, retailers have absorbed £6.5 billion in additional employment costs from rising employer NICs and the National Living Wage, alongside a new packaging tax (EPR) costing £1.6 billion.

Further regulatory burdens are imminent, including guaranteed hours provisions under the Employment Rights Act and the proposed reformulation of thousands of food lines under the new Nutrient Profiling Model - both due to land on a supply chain needs to focus on its resilience in the months ahead. 

Unlike wholesale energy prices, these policy costs do not ease when global markets stabilise, because they are determined by government and regulators, not by supply and demand.

The warning from retailers comes as polling by Opinium for the BRC shows that four in five people fear the conflict will push up food prices, while 73% expect it to raise the price of other products. Meanwhile, 81% are worried about rising energy bills, 76% about petrol and diesel, and 68% about tax increases.

Food retailers met with the Chancellor Rachel Reeves in early April and set out three specific asks, each targeting costs within government's direct control: Remove non-commodity energy costs; Delay implementation of the Nutrient Profiling Model; Review of the triple packaging levy.

Helen Dickinson, Chief Executive at the British Retail Consortium, says: "The Middle East conflict is driving up costs across the supply chain and families are right to be concerned. But not every pressure bearing down on retailers comes from the Gulf.”

“Higher national insurance, packaging levies, new regulations, and business energy charges are all domestic policy decisions, made in Westminster, and they can be addressed there. Such action by government would help retailers to keep prices affordable for households.” 

"Other governments are already acting. Germany has reduced electricity costs for businesses by moving levies off bills and EU leaders are actively discussing similar responses to this crisis. The UK should be moving in the same direction, not treating global instability as cover for inaction on costs of its own making.”

“Retailers are working hard to hold prices down, but they cannot do it alone. Every cost government chooses not to address is a cost that will find its way into someone's shopping basket. That is a political choice, and it is one ministers still have time to change, but the window to act is closing.”

2026 RTIH Innovation Awards

Food retail will be a key focus area at the 2026 RTIH Innovation Awards.

The awards are now open for entries and celebrate global retail technology innovation in a fast moving omnichannel world.

Our winners will be revealed at the 2026 RTIH Innovation Awards Ceremony, taking place at The HAC in Central London on Wednesday, 4th November.

Check out our 2025 winners here.

Our 2025 hall of fame entrants were revealed during a sold out event which took place at The HAC on 16th October and consisted of a drinks reception, three course meal, and awards ceremony presided over by award winning comedian, actress and writer Tiff Stevenson.

In his welcome speech, Scott Thompson, Founder and Editor, RTIH, said: “This is the awards’ fifth year as a physical event. We started off with just 30 people at the South Place Hotel not far from here, then moved to London Bridge Hotel, then The Barbican, and last year RIBA’s HQ in the West End.”

“But I’m conscious of the fact that, to quote the legend that is Taylor Swift, You’re only as hot as your last hit, baby. So, this year we’ve moved to our biggest venue yet, and also pulled in our largest number of entries to date and broken attendance records.”

He added: “This year’s submissions have without doubt been our best yet. To quote one of the judges: The examples of innovative developments across both traditional and digital retail spaces were truly remarkable.”

Congratulations to our winners, and a big thank you to our sponsors, judging panel, the legend that is Tiff Stevenson, and all those who attended our 2025 gathering.