Food inflation saw a 4.2% year-on-year increase in August, against a 4% growth in July, according to the latest BRC NIQ Shop Price Monitor.
The figures echo that of the ONS which earlier this month reported that food inflation grew 4.9% in July, up from 4.5% the month before.
Staples such as butter and eggs saw big increases. Fresh food inflation increased to 4.1% year on year in August, against growth of 3.2% in July and above a three month average of 3.5%. Meanwhile, ambient food inflation fell to 4.2% year on year in August, against growth of 5.1% in July and below its three month average of 4.5%.
Overall shop price inflation increased to 0.9% year on year in August, against growth of 0.7% in July and above a three-month average of 0.6%. Non-food inflation increased to -0.8% year on year in August, against a decline of -1.0% in July and above the three-month average of -1.0%.
Helen Dickinson, chief executive of the BRC, said: “Shop price inflation hit its highest rate since March last year, fuelled by food price rises. This adds pressure to families already grappling with the cost of living. Staples such as butter and eggs saw significant increases due to high demand, tightening supply, and increased labour costs. Chocolate also got more expensive as global prices of cocoa remain high owing to poor harvests. There was some respite for parents ahead of the new academic year, with lower prices for clothing, books, stationery, and computing.”
An uphill battle for retailers
Dickinson also reiterated the BRC’s call on government to not hit retailers again with tax rises in the next budget. “Retailers continue doing everything they can to limit price rises for households, but as the Bank of England acknowledged, the £7bn in new costs flowing through from last year’s Budget has created an uphill battle for retailers. That is why over 60 retail CEOs recently wrote to the Chancellor with a call to ensure there are no further taxes rises on retail this Autumn. The planned business rates reforms present an opportunity to deliver a meaningful reduction in retail, hospitality and leisure bills, ensure no shop pays more as a result and help retailers keep prices low for customers.”
Mike Watkins, head of retailer and business insight at NIQ, said: “The uptick in prices reflects several factors: global supply costs, seasonal food inflation driven by weather conditions, the conclusion of promotional activity linked to recent sporting events, and a rise in underlying operational costs. As shoppers return from their summer holidays, many may need to reassess household budgets in response to rising household bills.”
Stay informed
Our editor carefully curates two newsletters a week filled with up-to-date news, analysis and research. Click here to subscribe to the FREE newsletter sent straight to your inbox. Why not follow us on LinkedIn to receive the latest updates on our research and analysis?
