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Food inflation has grown to 10.6% in September 2022, up from 9.3% in August, which is above the three-month average rate of 9.1% and marks the highest rate of inflation in the food category on record, according to the British Retail Consortium (BRC) Nielsen IQ index.
Fresh food inflation also grew month-on-month from 10.5% to 12.1%, which is above the three-month average rate of 10.4%. This is also reportedly the highest inflation rate in the fresh food category on record.
Additionally, ambient food inflation accelerated to 8.6% in September, up from 7.8% in August. This is also above the three-month average rate of 7.4% and marks the fastest rate of increase in the ambient food category on record.
Overall, shop price annual inflation accelerated to 5.7%, above the three-month average rate of 5.1%. This marks another record for shop price inflation since this index started in 2005.
The BRC said the war in Ukraine has continued to drive up the price of animal feed, fertiliser and vegetable oil, causing fresh food inflation to rise “significantly” over the past few months, particularly for products such as margarine.
While the summer drought diminished some harvests, other produce reportedly benefitted from the prolonged sunshine, helping to bring down prices for fruits such as strawberries, blueberries, and tomatoes.
Non-food inflation also rose to 3.3%, largely driven by DIY, gardening and hardware products which, as heavier items, have been harder hit by rising transport costs.
Helen Dickinson OBE, chief executive of the BRC, said: “Retailers are battling huge cost pressures from the weak pound, rising energy bills and global commodity prices, high transport costs, a tight labour market and the cumulative burden of government-imposed costs.
“With business rates set to jump by 10% next April, squeezed retailers face an additional £800m in unaffordable tax rises. Government must urgently freeze the business rates multiplier to give retailers more scope to do more to help households.”
Mike Watkins, head of Retailer and Business Insight at NielsenIQ, added: “With food and household energy prices continuing to rise, it’s no surprise that NielsenIQ data shows that 76% of consumers are saying they expect to be moderately or severely affected by the cost-of-living crisis over the next 3 months, up from 57% in the summer.
“So households will be looking for savings to help manage their personal finances this autumn and we expect shoppers to become more cautious about discretionary spend, adding to pressure in the retail sector.”
