Shop prices in the UK grew at the fastest rate in more than a decade in May, driven mainly by accelerating food inflation.
According to the latest shop price index from the British Retail Consortium (BRC) and NielsenIQ, retail price inflation rose to 2.8 percent in May, the highest figure since July 2011.
It said this accelerated from a 2.7 percent rise in April as rapidly rising food prices offset discounting and promotions in clothing and homeware.
BRC chief executive Helen Dickinson said: “Retail prices edged up further as commodity, energy, and transport costs continued to climb.”
“Fresh food inflation hit its highest rate in a decade, with items like poultry and margarine seeing some of the largest increases due to soaring costs of animal feed and near-record global food prices,” she added.
Food inflation leapt to 4.3 percent in May from 3.5 percent in April, reaching the highest level since April 2012.
Fresh food prices grew by 4.5 percent while ambient food, such as store-cupboard staples, rose by 4 percent for the month.
Dickinson said that retailers have been “working hard to protect their customers from these rising costs, particularly at a time when households are being impacted by a huge rise in household energy bills.”
But she said the situation is “likely to get worse before it will get better for consumers with prices continuing to rise and a further jump in energy costs coming in October.”
Retailers will be “left with little room for manoeuvre,” she said, especially those whose supply chains are affected by the war in Ukraine and the COVID-19 lockdowns in China caused by the Chinese Communist Party (CCP)’s zero-COVID policy.
Mike Watkins, head of retailer and business insight at NielsenIQ, said: “The acceleration in food inflation reflects the fact that retailers can no longer absorb the full extent of increased supply chain costs now hitting the industry.
“Promotions remain close to an all-time low and price cuts rather than volume-based offers such as multibuy are now the best way for retailers to help their shoppers manage their household budgets.”
Last week, the UK government announced a £15 billion ($19 billion) relief package for households struggling with rising bills, funded by a temporary windfall tax on oil and gas giants.
“While many people will welcome the government’s latest announcement of support,” said Dickinson, “uncertainty in the future of energy prices means they may only provide temporary respite.”
