The British Retail Consortium (BRC) yesterday (Wednesday 31 August) confirmed food inflation had accelerated to 9.3% in August, up from 7% in July and above the 3-month average rate of 7.2%, the highest inflation rate since August 2008.
Fresh food inflation rose from 8% to 10.5% while ambient food inflation increased from 5.7% to 7.8%, the highest rates since September 2008 and March 2009 respectively, with products such as milk, margarine and crisps having seen the biggest rises, according to the BRC.
BRC chief executive Helen Dickinson OBE said: “Mounting cost pressures up and down supply chains meant shop price inflation hit a new high in August.
Growing cost pressures
“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.
“As retailers grapple with growing cost pressures, there is only so much they can shoulder.
“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.”
Dickinson added the rise in food retail prices had “played into” wider UK inflation, which exceeded 10% earlier this month.
Furthermore, shop price annual inflation accelerated to 5.1% in August, up from 4.4% in July and above the 3-month average rate of 4.1%, marking a new record for shop price inflation since the BRC's index started in 2005, while non-food inflation decelerated to 2.9% in August, down from 3% in July.
This comes as pubs have been left “desperately” trying to make ends meet amid soaring energy costs.
“Rising energy costs are threatening closures, whilst those that are managing to keep afloat are having to pay over the odds for ingredients for food and drinks as well as labour.
“Publicans are desperately trying to find ways to make ends meet but even passing costs onto customers has become untenable, we urgently need an energy price cap for businesses and action on other inflationary pressures before they wreak havoc through our sector.”