Why you now need a lot more dough to go out for a pizza

Food prices in the UK have risen more rapidly than other costs. While overall prices across services and products in the UK have increased by 27% since August 2020, food prices have risen by 35%. In the previous five-year period, food prices rose by just 4.4%.

Food growers, manufacturers and retailers have been hit hard by a convergence of factors.

The Covid-19 pandemic disrupted supply chains and increased labour costs. The war in Ukraine, a country that provided many vegetable oils, cereal crops and animal feed, led to a rise in the price of specific products. Then there’s the impact of Brexit, climate change, new industry regulations and energy costs.

“I’m not sure the broader public realises how energy-intensive food manufacturing is,” says Dr Liliana Danila, lead economist at the Food and Drink Federation (FDF). For sectors such as dairy “all their production costs went up”, says Danila. And for consumers, that means a more expensive breakfast: whole milk is up 32% over the past five years and yoghurt 36%. The price of butter has risen by a similar amount.

The steep climb in olive oil prices is “to do with [an] adverse climate in Europe, like in Spain, Greece and Italy”, says Danila. “All the major producers had seen big droughts. Output was restricted and therefore prices shot up.” It’s the same for coffee and chocolate. In the year to July 2025, thanks to adverse weather conditions in the main producing countries, the price of coffee beans rose 18% and chocolate 17.2%.

“Food inflation remains elevated, with prices for staples like beef, butter and chocolate rising significantly over the past year,” says Harvir Dhillon, economist at the British Retail Consortium. “These increases are being driven by a combination of global commodity pressures, and domestic factors including higher feed costs, poor harvests and rising labour costs. While some categories like pasta and flour have seen modest declines, the overall picture is one of persistent cost pressures.”

Pizza Express margherita pizza £9.30/£14.45

Lindt truffles £12.99/£19.50

Starbucks medium latte £2.50/£3.90

Filippo Berio extra virgin olive oil £4.25/£8.75

The FDF estimates that food inflation could hit 5.7% by the end of this year, as the costs of new industry regulations hit.

Danila highlights last April’s increase in employer national insurance contributions, and the new extended producer responsibility for packaging scheme, which will see the cost of recycling move from taxpayers and local authorities to the businesses that produce packaging. Companies will make their first payments towards the scheme in October.

“It’s estimated that these will cost [the industry] about £1.1bn per year,” she says. Food manufacturers have made adjustments to their operations over the past five years to avoid passing on costs to consumers, Danila adds, but says most have now reached their limit. “Manufacturers have no room to absorb more cost rises, but then also consumers have no ability to support the cost rises.”

The FDF is calling on the chancellor to consider food inflation in the upcoming autumn budget. Karen Betts, FDF chief executive, says: “It’s critical that [the] government does not add further to the already high costs of regulation in our sector.”

Photograph by Tolga Akmen/AFP via Getty Images