Food prices have raced to a 45-year high as cost pressures continued to mount across the sector.
Food and non-alcoholic beverage prices rose by 16.2% in the 12 months to October, up from 14.5% in September, according to the Office for National Statistics (ONS).
Milk, cheese and eggs were the biggest contributors to the rise, with recording inflation of more than 20%, while bread, cereals, fish, meat and vegetable prices all rose more than 15% and fats and oils prices were 33% ahead year-on-year. Alcoholic drinks and tobacco also moved higher, up from 5.5% to 6.1%.
The ONS estimated food prices were now at their highest annual rate since September 1977.
Food inflation contributed to a jump in the overall consumer price index, which hit 11.1% in the year to October, up from 10.1% in the previous month.
Despite the soaring price of food, the biggest driver of the overall rate of inflation was from spiralling energy costs as the new price cap came into effect.
Inflation would have hit 13.8% without the energy price guarantee introduced by former PM Liz Truss.
ONS chief economist Grant Fitzner said over the past year, gas prices had climbed nearly 130% while electricity had risen by around 66%. This was partially offset by motor fuels, where average petrol prices fell 0.5%, but were still around 18% more expensive than they were a year ago. Average petrol and diesel prices stood at 163.6p and 183.9p per litre respectively in October 2022, compared with 138.6p and 142.2p per litre a year earlier.
Shore Capital analyst Clive Black said price pressure in the food system was “absolutely in the unmanageable territory for most”.
“Shoppers are adjusting to the eye-watering price rises by becoming more precise in their missions, some visiting limited assortment discounters more, many exploring private label over proprietary brands and in some cases switching zones from fresh to frozen,” he added.
“There is growing talk of less eating out in the food and beverage channel, which may benefit supermarkets.”
Karen Betts, Food and Drink Federation chief executive, said manufacturers had seen, on average, a 21% rise in their costs over the past year, with the high cost of energy “particularly significant”.
She added: “This has meant that some costs are having to be passed onto consumers. Government could help ease these pressures by reducing the costs of doing business, for example through simplifying regulation, reducing the cost of trade with the EU, and helping companies to invest in growth, innovation and skills through tax incentives.
“To that end, we’re looking forward to seeing what measures the chancellor will set out in his Autumn Statement tomorrow.”
Helen Dickinson, chief executive of the British Retail Consortium, also called on the government to act on business rates to prevent inflation spiralling further.
“Unfortunately, there are few signs the cost of living crisis will abate any time soon,” she said.
“Tomorrow, the chancellor will unveil the autumn budget, where he has the opportunity to provide support for struggling households and relieve some of the costs on retailers and their suppliers, which in turn put pressure on prices.
“Retailers face an £800m per year hike in business rates from April 2023, so urgent government action is needed to mitigate this and prevent even higher inflation in the new year. The budget is also a chance to fix the broken transitional relief scheme, which forces retailers to pay far more business rates than they owe.”
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