Fresh food prices rise at fastest pace since financial crisis
Fresh food items appear to be rising in price at the fastest pace to 6.2% in June, up from 4.5% in May. This is the highest rate of inflation since May 2009, the British Retail Consortium (BRC) noted.
In general, food inflation has also seen a steep rise to 5.6% in June, up from 4.3% in May. This is above the average level recorded in both a 12-month and six-month period, and is the highest inflation rate since June 2011.
Turning to shop price annual inflation, this figure accelerated to 3.1% in June, up from 2.8% in May which is above both the 12-month and six-month figures.
According to the BRC, this marks the highest rate of inflation since September 2008.
Helen Dickinson, chief executive of the BRC said: “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.
“As households face the biggest real terms cut in income since at least the 1970s and businesses grapple with upstream supply chain costs, retailers remain focused on protecting their customers. Fierce competition means that retailers will continue to absorb as much of these costs pressures as possible and look for efficiencies in their businesses.”
Dickinson added that supermarkets are also expanding their value ranges to offer a wider choice for customers trading down and providing discounts to vulnerable groups.
“Retailers are working to find more ways to protect their customers from the worst effects of inflation, but if costs continue to spiral, government may need to find ways to help retail businesses support their customers,” she said.
‘Everything on the up’
Myron Jobson, senior personal finance analyst at Interactive Investor, said: “The outlook for consumers is bleak, with energy bills set to spike again in Autumn, while the tragic war in Ukraine is likely to further drive-up food costs the price of energy and other goods, exacerbating the cost-of-living squeeze on household budgets.
“With the cost of seemingly everything on the up, it can be difficult to gauge how and when your finances might be hit, so it remains important to pay extra attention to your financial wellbeing and consider what protective steps you can take now to avoid money worries later.
“Making use of supermarket loyalty cards and schemes can go a long way in offsetting price increases. Most loyalty initiatives offer worthwhile savings ranging from exclusive discounts to members to freebies by earning points. Every little helps amid the biggest fall in living standards in generations.”