The British Retail Consortium (BRC) has responded to the latest inflation figures, which span the first week of August.
Food inflation increased to 4.2% year-on-year, against growth of 4% in July and above the three-month average of 3.9%. There were further increases with fresh food, where inflation increased to 4.1% year-on-year, against growth of 3.2% in July, just over the three-month average of 3.5%.
However, ambient food inflation decreased to 4.2% year-on-year, against growth of 5.1% in July and below the three-month average of 4.5%.
In response, Helen Dickinson (left), 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.
“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’s 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, to ensure no shop pays more as a result and also help retailers keep prices low for customers.”
Mike Watkins, head of retailer and business insight, at analysts NIQ, added: “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.”
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