UK retailers are becoming more cautious on price hikes as new data suggests inflationary pressures are beginning to moderate across the sector.
The latest Office for National Statistics Business Insights and Conditions Survey found that 20 per cent of trading businesses expect to raise prices in June, down from 28 per cent in May.
However, the figure remains above the levels recorded in June 2025 and June 2024.
The wholesale and retail trade sector remains one of the industries most likely to increase prices, with 30 per cent of businesses expecting to do so in June.
Only manufacturing reported a higher proportion, at 32 per cent.
The findings suggest businesses are taking a more restrained approach to pricing amid fragile consumer demand and continued scrutiny over household costs.
The ONS said 41 per cent of trading businesses were not considering any price rises in June, up from 36 per cent in the previous survey period.
It also noted that businesses have historically overestimated future price rises. Since April 2022, the proportion of firms expecting to increase prices has consistently been higher than the proportion that later reported doing so.
Retailers are still facing significant cost pressures, despite the fall in businesses planning increases.
Energy prices were the most commonly cited reason for considering higher prices, mentioned by 28 per cent of businesses. This was down from 34 per cent in May, but remains one of the highest readings since mid-2023.
Labour costs were cited by 24 per cent of businesses, while raw materials and transport costs were each mentioned by 21 per cent.
Among larger businesses with 10 or more employees, labour costs were the leading reason for potential price rises, cited by 43 per cent of respondents. Energy prices followed at 36 per cent.
The survey also found that 60 per cent of businesses remained concerned about energy prices, with accommodation and food service firms reporting the highest levels of concern.
The data comes as retailers continue to navigate a difficult trading environment.
According to the ONS, 27 per cent of trading businesses reported lower turnover in April compared with the previous month, while economic uncertainty remained the most commonly cited challenge affecting performance.
Supply chain disruption also remains an issue. Seven per cent of businesses reported global supply chain disruption in April, with almost half of those affected citing conflict in the Middle East as a contributing factor.
The latest figures suggest retailers are balancing rising operating costs against weak household spending and competitive pressure on prices.
While inflationary pressure has not disappeared, the fall in firms planning price rises shows a sector increasingly reluctant to pass further costs directly on to shoppers.
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