Food prices: Four in five Britons fear Iran war will raise grocery costs

A new Opinium poll shows a large majority of Britons fear the Iran war will feed through into higher grocery prices, while the retail sector has urged the government to act quickly to ease energy costs.

Opinium’s survey of roughly 2,050 UK adults conducted in early March found about 80% of respondents worried about rising supermarket prices and 73% expecting the conflict to raise prices of other goods. The British Retail Consortium (BRC) told ministers the conflict is increasing energy, production, shipping and distribution costs — pressures that could force retailers to pass on higher costs to consumers. Executives from major supermarket chains have pressed for targeted relief on non-commodity energy levies.

The immediate market impact is concentrated in input cost inflation: disruptions to oil and gas flows, and a squeeze on fertilizer supplies, raise manufacturing and transport costs for food producers. UK retail groups are managing inventories and hedging exposures, but analysts warn margins will come under strain if cost pressures persist and retailers begin wider price pass-through. Some publicly listed grocers have already flagged margin risk to investors.

In the broader economic context, the Iran conflict has contributed to volatility in energy markets and renewed concerns about second-round effects on inflation. UK consumer sentiment measures have weakened as households weigh higher fuel and grocery bills, while official inflation readings and central bank commentary suggest policymakers are monitoring the risk of entrenched price rises. The policy response — from temporary support measures to structural levy changes — will be decisive for household purchasing power.

Market commentators say the near-term outlook depends on the duration of supply disruptions and the speed of any targeted government intervention. If ministers move quickly to reduce business energy levies, retailers may avoid full price pass-through; if not, food inflation could remain elevated and weigh on consumer spending and retail sector earnings in the coming quarters. Investors will be watching earnings updates and government announcements closely.