According to a new report by the British Retail Consortium, shop prices are now higher than ever with July seeing the highest rate of shop price inflation since the index began in 2005.
Shop Price annual inflation accelerated to 4.4% in July, up from 3.1% in June. This is above the 12- and 6-month average price increases of 1.5% and 2.8%, respectively. This marks the highest rate of shop price inflation since the index first started in 2005.
Food inflation strongly accelerated to 7.0% in July, up from 5.6% in June. This is above the 12- and 6-month average price growth rates of 2.8% and 4.4%, respectively. This is the highest inflation rate since May 2009.
Non-Food inflation accelerated to 3.0% in July, up from 1.9% in June. This is above the 12- and 6-month average price increases of 0.8% and 2.0%, respectively. This was a record-high, beating the previous record of 2.2% in April 2022.
Fresh Food inflation strongly accelerated in July to 8.0%, up from 6.2% in June. This is well above the 12- and 6-month average price growth rates of 2.9% and 4.8%, respectively. This is the highest inflation rate since May 2009.
Ambient Food inflation accelerated to 5.7% in July, up from 4.8% in June. This is above the 12- and 6-month average price increases of 2.5% and 3.8%, respectively. This is the fastest rate of increase since April 2012.
Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said:
“July saw the highest rate of shop price inflation since our index began in 2005, as heightened cost pressures continued to filter through to customers. 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 to 7 percent. 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.”
Mike Watkins, Head of Retailer and Business Insight, NielsenIQ, said:
“Consumers’ household budgets are coming under increasing strain and shelf price increases in both food and non-food have accelerated in recent weeks as more cost prices increases come through the supply chains. The grocery industry in particular is under intense pressure as retailers try to shield customers from the full impact of inflation. At the same time there has been an increase in competitive intensity so customer retention over the summer holiday season will be key to help stem any further fall in volumes.”