Food prices in August rose at the fastest rate since 2008, says British Retail Consortium | Business News
Food prices rose at their fastest rate since 2008 in August – up 9.3% after a 7% increase last month.
The figure comes from the British Retail Consortium (BRC) and NielsenIQ index, which blamed the Ukraine war and its effect on the price of animal feed, fertiliser, wheat, and vegetable oils.
Fresh food prices were 10.5% higher than last August, up from the 8% annual increase recorded in July, with products such as milk and margarine seeing the biggest rises.
Shop price annual inflation also increased to 5.1% in August, up from 4.4% in July, and is now the highest since 2005 when the BRC index started.
The rise in food prices is one of the key drivers of inflation, which hit 10.1% in the 12 months to July, up from 9.4% in June, according to the Office for National Statistics (ONS).
Some analysts believe it could exceed 18% next year, when more huge energy price rises are set to kick in.
BRC chief executive Helen Dickinson said the outlook was “bleak for both consumers and retailers”, but that businesses would support people through “discounts to vulnerable groups, expanding value ranges, fixing prices of essentials, and raising staff pay”.
But she said mounting costs meant “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,” added Ms Dickinson.
Data earlier this month showed workers had suffered a record real-term wage slump, prompting millions of public sector employees to vote for what could be the biggest wave of strike action since the 1970s.
Mike Watkins, head of retailer 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.
“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.”