Shop price inflation touches highest ever

Shop price annual inflation accelerated to 4.4 per cent in July, up from 3.1 per cent in June, revealed a report by British Retail Consortium today (27).  

The recent figures are above the 12- and 6-month average price increases of 1.5 per cent and 2.8 per cent, respectively, marking the highest rate of shop price inflation since the index first started in 2005.  

Food inflation strongly accelerated to 7.0 per cent in July, up from 5.6 per cent in June. This is above the 12- and 6-month average price growth rates of 2.8 per cent and 4.4 per cent, respectively. This is the highest inflation rate since May 2009.  

Non-Food inflation accelerated to 3.0 per cent in July, up from 1.9 per cent in June. This is above the 12- and 6-month average price increases of 0.8 per cent and 2.0 per cent, respectively. This was a record high, beating the previous record of 2.2 per cent in April 2022.  

Fresh Food inflation strongly accelerated in July to 8.0 per cent, up from 6.2 per cent in June. This is well above the 12- and 6-month average price growth rates of 2.9 per cent and 4.8 per cent, respectively. This is the highest inflation rate since May 2009.  

Ambient Food inflation accelerated to 5.7 per cent in July, up from 4.8 per cent in June, increasing from 12- and 6-month average price by 2.5 per cent and 3.8 per cent, respectively, marking the fastest rate of increase since April 2012.  

Reacting to the BRC’s figures, Helen Dickinson OBE, chief executive of BRC said that 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 seven per cent.  

“Some of the biggest rises were seen in dairy products, including lard, cooking fats and   butter. Meanwhile, non-food prices were hit by rising shipping prices, production costs and continued disruption in China.  

“As inflation reaches new heights, retailers are doing all they can to absorb as much of these rising costs as possible and to look for efficiencies in their businesses and supply chain.  

With households enduring a cost-of-living crunch, retailers are expanding their value ranges to offer the widest variety of goods to those most in need, providing discounts to vulnerable groups, and raising staff pay. Nevertheless, households and businesses must prepare for a difficult period as inflationary pressures hit home.”  

Mike Watkins, Head of Retailer and Business Insight, NielsenIQ, said, “Consumers’ household budgets are coming under increasing strain and shelf price increases in both food and non-food have accelerated in recent weeks as more cost prices increases come through the supply chains.  

“The grocery industry in particular is under intense pressure as retailers try 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.”