Shop prices jump by the most since 2008

Shop price annual inflation accelerated to 3.1 per cent in June, up from 2.8 per cent in May, industry data showed Wednesday, marking the highest rate of inflation since September 2008.

This was mainly driven by rising food prices, with food inflation strongly accelerating to 5.6 per cent in June, up from 4.3 per cent in May, according to the BRC-NielsenIQ Shop Price Index. This is the highest inflation rate since June 2011.

Fresh food inflation has seen the highest figure at 6.2 per cent, up from 4.5 per cent in May. Ambient Food inflation accelerated to 4.8 per cent in June, up from May’s 4.0 per cent in May.

Non-food inflation, meanwhile, decelerated to 1.9 per cent in June, settling down from 2.0 per cent in May.

“Last month households and businesses were hit by the highest rate of inflation since the 1980s as near-record commodity prices in energy, transport and food filtered through the supply chain. Food prices rose sharply, particularly for fresh foods such as cheese which has been affected by the spiralling costs of fertiliser and animal feed,” Helen Dickinson, chief executive of the British Retail Consortium (BRC), said.

Mike Watkins, head of retailer and business insight, NielsenIQ, added: “Whilst the fast-moving consumer goods industry is more insulated from any downturn in consumer expenditure, food retailing is not immune.

“As inflation accelerates due to rising energy, travel and now food costs, shoppers are now more likely to cut down on out of home consumption, shop to a fixed budget, switch to cheaper private label and seek out retailers where prices are the lowest.”