Food prices have hit a 13-year high as spiralling production costs piled more pressure on the grocery sector, according to the latest industry data.
The rises on supermarket shelves contributed to a jump in overall shop price inflation, across food and non-food, to 4.4% in July, up from 3.1% in the prior month and the highest rate on record since the BRC-NielsenIQ index began in 2005.
Food inflation strongly accelerated to 7% this month, the highest level since May 2009 and up from 5.6% in June.
Fresh food soared to 8%, compared to 6.2% last month, driven by big jumps in prices of dairy items such as butter, lard and cooking fats.
Ambient moved up from 4.8% higher in June to 5.7% in July – the fastest pace of increase since April 2012.
It follows the Office for National Statistics revealing food price increases are now outpacing the 9.4% headline rate of UK inflation, rising 9.8% in the 12 months to June.
Kantar also this month said consumers were facing an average rise of £454 to their annual food shopping bill.
BRC chief executive Helen Dickinson said this morning that households and businesses should prepare for a difficult period as inflationary pressures hit home despite retailers trying to absorb as much as possible.
“July saw the highest rate of shop price inflation since our index began in 2005, as heightened cost pressures continued to filter through to customers,” she added. “Rising production costs – from the price of animal feed and fertiliser to availability of produce, exacerbated by the war in Ukraine – coupled with exorbitant land transport costs, led food prices to rocket to 7%.”
Mike Watkins, head of retailer and business insight at NielsenIQ, said the grocery industry in particular was under “intense pressure” as retailers tried to shield customers from the full impact of inflation.
“At the same time there has been an increase in competitive intensity so customer retention over the summer holiday season will be key to help stem any further fall in volumes.”
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