The rising price of both fresh and ambient food is driving overall inflation, as the £7bn of added costs from last year’s Budget continue to feed through to customers.
Shop price inflation increased to 0.9% year on year in August, compared to a 0.7% jump in July and above the 0.6% three-month average increase, according to the latest BRC Shop Price Monitor.
Food inflation across both fresh and ambient jumped 4.2% year on year in the period, compared to a 4% increase in July.
Fresh food inflation jumped 4.1%, while ambient food inflation jumped 4.2%, albeit decreasing from a 5.1% jump in July.
Non-food inflation increased to -0.8% year on year in August, against a decline of -1.0% in July. This is above the three-month average of -1.0%.
BRC chief executive Helen Dickinson blamed growing shop price inflation on last year’s Budget.
“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,” she said.
“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 tax 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.”
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