Shop price inflation hits highest level since 2008

Shop price annual inflation increased to 3.1% in June 2022, up from 2.8% in May, marking the highest rate of inflation since September 2008, according to the British Retail Consortium (BRC).

Food inflation also rose to 5.6% in June, up from 4.3% in May. This marks the highest inflation rate since June 2011, also growing above the 12 and 6 month average price growth rates of 2.2% and 3.7%, respectively.

Additionally, fresh food inflation “strongly” accelerated in June month-on-month from 4.5% to 6.2%, increasing from the 12 and six month average price growth rates of 2.2% and 4.0%, and marking the highest inflation rate since May 2009.

Ambient Food inflation also rose to 4.8% in June from 4% in May, which is the highest rate of increase since May 2012, and is above average price increases of 2.1% and 3.3%, respectively.

Meanwhile, non-food inflation dropped to 1.9% in June, settling down from 2% in May, which is above the 12 and 6 month average price increases of 0.4% and 1.6%.

Helen Dickinson OBE, chief executive of the BRC, said: “Last month households and businesses were hit by the highest rate of inflation since the 1980s as near-record commodity prices in energy, transport and food filtered through the supply chain. Food prices rose sharply, particularly for fresh foods.

“Fierce competition means that retailers will continue to absorb as much of these cost pressures as possible and look for efficiencies in their businesses. Retailers are working to find more ways to protect their customers from the worst effects of inflation, but if costs continue to spiral, the Government may need to find ways to help retail businesses.”

Mike Watkins, head of Retailer and Business Insight at NielsenIQ, added: “As inflation accelerates due to rising energy, travel and now food costs, shoppers are now more likely to cut down on out of home consumption, shop to a fixed budget, switch to cheaper private label and seek out retailers where prices are the lowest.”