Source > i News
29 June 2022 06:00 BST
The price of groceries grew by 3.1 per cent in June, accelerating from May’s increase to hit the highest rate of shop price inflation since September 2008, as inflation reached its highest level since the 1980s, data shows.
Food costs grew at an even higher rate of 5.6 per cent over the past month, up from 4.3 per cent in May, to reach the highest inflation rate since June 2011, figures published by the British Retail Consortium (BRC) show.
The trade body points out that the increase in food prices far outstrips the average increases recorded over the past 6 months (3.7 per cent) and year (2.2 per cent), showing that the rate of change is increasing as the cost of living crisis continues to take hold.
June’s increase in food costs was propelled by fresh food inflation, which stood at 6.2 per cent in June. The BRC said that some fresh foods, including cheese, were being pushed ever-higher by the spiralling costs of fertiliser and animal feed.
The cost of non-food items, meanwhile, increased by 1.9 per cent in June, slower than May’s 2 per cent rise but still close to a record high in the BRC’s data. It marks the highest inflation rate recorded since May 2009.
Prices of packaged food, also known as ambient food, accelerated to 4.8 per cent in June, up from 4 per cent in May.
Helen Dickinson, chief executive of the British Retail Consortium, said that the increases would continue to rise as the record commodity price highs for energy, transport and food were still filtering through the supply chain.
“As households face the biggest real-terms cut in income since at least the 70s and businesses grapple with upstream supply chain costs, retailers remain focused on protecting their customers,” she said.
“Fierce competition means that retailers will continue to absorb as much of these costs pressures as possible and look for efficiencies in their businesses. Supermarkets are also expanding their value ranges to offer a wider choice for customers trading down and providing discounts to vulnerable groups.”
Research by market data provider NielsenIQ found that shoppers are increasingly going for cheaper choices as they try to navigate the cost of living crisis, with sales of frozen poultry, grains, canned beans and dry pasta all increasing rapidly in the four weeks to 18 June, on a year-on-year basis.
Spending on beers, wines and spirits – as well as “general merchandise” – fell rapidly in the same period as consumers cut back their discretionary spending.
But data collected by NationalWorld earlier this month found the price of a quarter of value range groceries at UK supermarkets were raised last month, with almost 200 items affected.
Mike Watkins, head of retailer and business insight at NielsenIQ, said:
“Whilst the fast-moving consumer goods industry is more insulated from any downturn
in consumer expenditure, food retailing is not immune.
“As inflation accelerates due to rising energy, travel and now food costs, shoppers are now more likely to cut down on out-of-home consumption, shop to a fixed budget, switch to cheaper private label and seek out retailers where prices are the lowest.”
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