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New data from the British Retail Consortium (BRC) and NielsenIQ index has shown that food prices have risen at their fastest rate since 2008 in August, with an increase of 9.3% after an initial 7% increase last month.
The BRC reported that fresh food was more than 10% more expensive than last August, as essentials such as milk and margarine also went up in price.
The data gathered by the BRC also showed that shop price annual inflation increased to 5.1% in August, up from 4.4% in July, and is now the highest since 2005 when the BRC index started.
Most worrying is the fact that the rise in food prices is reportedly one of the key drivers of inflation, which hit 10.1% in the 12 months to July, an increase from 9.4% in June, according to the Office for National Statistics (ONS).
Helen Dickinson OBE, chief executive of the British Retail Consortium, said: “Mounting cost pressures up and down supply chains meant shop price inflation hit a new high in August. The war in Ukraine, and consequent rise in the price of animal feed, fertiliser, wheat and vegetable oils continued to push up food prices.
“The situation is bleak for both consumers and retailers, but retail businesses will remain committed to supporting their customers through offering discounts to vulnerable groups, expanding value ranges, fixing prices of essentials, and raising staff pay. However, as retailers also grapple with growing cost pressures, there is only so much they can shoulder.”
She added: “The new Prime Minister will have an opportunity to relieve some of the cost burden bearing down on retailers, like the upcoming increase in business rates, in order to help retailers do more to help their customers.”
Mike Watkins, head of retail and business insight at NielsenIQ, said: “Inflation continues to accelerate and shoppers are already cautious about how much they spend on groceries, with a fall in volume sales at supermarkets in recent months.
“We can expect this level of food inflation to be with us for at least another six months, but hopefully some of the input cost pressures in the supply chain will eventually start to ease.”
He added: “However, with further falls in disposable incomes coming this autumn as energy costs rocket again, retail spend will come under pressure in the all-important final quarter of the year.”
