Reflections on the Farm Shop Sector in 2025

2025 has been another testing yet positive year for farm shops across the UK. Rising costs, tightening margins, government changes in National Insurance, wages and business rates, and fierce supermarket competition have placed real pressure on independent rural retailers such as farm shops. And yet, what has stood out most is the sector’s resilience. Despite the headwinds, many farm shops have not only held their ground but continued to grow in value by staying true to what makes them special…. albeit they have had to adapt to do so in many cases.

At Pleydell Smithyman, as one of the UK’s leading farm shop consultants, we work closely with owners and operators across the country. What we’ve seen first-hand is a sector that understands its customers deeply and responds with care, creativity and confidence.

What Drove Performance in 2025

A Continued Commitment to Real, Local and Quality Food

Consumer support for local, traceable and high-quality produce remained strong throughout the year. This isn’t a passing trend – it’s a value shift that has been building since the pandemic. Even with ongoing cost-of-living pressures, shoppers continued to prioritise food they trust. The focus on produced food in particular, performed strongly, with this creating appoint of difference versus other retailers. This reinforces what many farm shop owners already know: customers are willing to pay for quality and community, when they understand the story behind it.

Service as a Point of Difference

Farm shops once again demonstrated the power of personal service. Knowledgeable staff, meaningful conversations and a genuine passion for food created loyalty that large supermarkets often struggle to replicate – especially as many supermarkets continue to reduce service-led counters such as delis and butchery. These human touches matter, and they remain one of the farm shop sector’s greatest strengths.

Agility and Niche Innovation

Smaller, independent retailers proved agile in responding to emerging trends – from sourdough and plant-based diets to products with a reduced carbon footprint or with unique flavours (I am thinking about Groombridge Farm Shop marmite sausage roll here that is amazing!). Offering distinctive, locally sourced lines that can’t be found on a supermarket shelf helped many farm shops stand out and stay relevant in a crowded market and this is proving to be the standout development I have witnessed in recent years.

Strength in Key Sectors

There were also bright spots within the wider supply chain for suppliers of farm shops.. Garden centres – many of which incorporate food halls and cafés – benefited from favourable early-2025 weather, increased footfall and a renewed appetite for destination retail.  How does this impact on farm shops – we often see the same product on the shelves in a good food hall which is seen in a farm shop.  This helps supplier growth, continuity and prices.

The Pressures Facing Farm Shops

Of course, these successes in farm shops have not come easily.

Rising business rates, increased employer National Insurance contributions and higher minimum wages all placed additional strain on already tight margins. At the same time, global commodity price volatility – particularly for products such as beef, cocoa and coffee – which in some cases fed through to higher import costs and retail prices.

Supermarket competition also intensified. With economic uncertainty and the threat of recession, price wars in the multiples made it even more important for farm shops to clearly communicate value – not just in terms of price, but through quality, experience and trust.  We also saw some national retailers improving their proposition and store designs to encourage farm shop customers into their supermarkets.

Workforce challenges continued to be a major concern. Recruiting and retaining skilled, reliable staff remains one of the most commonly cited pressures across the sector.

Looking Ahead

What 2025 has shown me is that farm shops that remain focused on their unique proposition – quality food, local sourcing and genuine service – are best placed to thrive, even in challenging conditions.

I know at Pleydell Smithyman, we are proud to support farm shop businesses at every stage of their journey, helping them adapt, grow and plan confidently for the future.  Our work with the Farm Retail Association and Farm & Deli Show Awards are a snippet of this, but we are truly committed to making independent business great and love working with the people we work with.

For Farm Shops, the challenges are real, but so too is the opportunity. The farm shop sector continues to prove its value – not just economically, but at the heart of local communities.

I am looking forward to seeing what 2026 brings us, but I am confident it will continue to show adaptability, growth, diversification and development!