July shop prices show highest rise on record
This is above the 12- and six-month average price increases of 1.5% and 2.8%, respectively, and marks the highest rate of shop price inflation since the index started in 2005.
According to BRC figures, food inflation accelerated to 7% in July, up from 5.6% in June. This is above the 12- and six-month average price growth rates of 2.8% and 4.4%, respectively, and is the highest inflation rate since May 2009.
Non-food inflation accelerated to 3% in July, up from 1.9% in June. This was a record-high, beating the previous record of 2.2% in April 2022.
The BRC said 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.
Helen Dickinson OBE, BRC chief executive, said: “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.”
Myron Jobson, senior personal finance analyst at Interactive Investor, says: “Runaway inflation is hitting the items consumers need most hardest, which makes the biggest spike in prices in 40 years impossible to dodge. Many consumers are feeling the inflationary pinch the most when shopping for groceries – particularly those on the breadline.
“Reducing the impact you feel from inflation starts first with tracking how expensive items you buy have become. Interactive investor’s sample grocery basket found that staple goods have increased by as much as 56%.
“Shopping around and opting for cheaper alternatives – a long-running advice for tackling rising prices – is a greater challenge as almost every food item gets more expensive. But every little helps in the battle against inflation. Making use of supermarket loyalty cards and schemes can also 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.”