Fresh food inflation increased to 2.0% year on year in December, as overall shop prices continued to decline, according to the latest BRC-Nielsen Shop Price Index.
Food prices rose by 1.8% last month on the previous year, up from 1.5% in November, on the back of growing global food prices earlier in the year. Fresh food inflation rose by 0.7% from 1.3% in November.
Ambient food inflation continued at a similar pace, with prices up 1.7% year on year in December, slightly down from the 1.8% recorded in November.
Overall shop price inflation fell by 0.6% on the previous year, compared to 0.1% in November.
BRC chief executive Helen Dickinson said: “Food inflation picked-up pace this month, fuelled by climbing global food prices earlier in the year. While retailers will continue to do their best to absorb cost increases for their customers, the challenges to the industry remain stark with more inflationary pressures in the pipeline.
“Therefore, this year we will continue to press the government for clarity on the principles and terms around the Brexit transitional arrangements, to ensure businesses have the certainty to plan and invest and that consumers don’t face higher costs or delays from tariffs or onerous customs barriers.”
Nielsen’s head of retailer and business insight, Mike Watkins, said: “Whilst food prices have edged up a little due to supply chain increases in fresh and seasonal foods, pricing across Supermarkets will remain competitive as we start 2018 with consumers still coping with higher household bills.”