Shop prices accelerated in May at the fastest rate in more than a decade, according to new figures that reveal the pressure on retailers to pass on the cost of rising energy bills and the soaring price of imports.
Amid warnings that consumers face further pain in the summer from high street and online price hikes, the latest shop price index from the British Retail Consortium and NielsenIQ revealed retail price inflation of 2.8% in May, the highest figure since July 2011.
The BRC said a jump in the price of food, which offset discounting and promotions in clothing and homeware, accounted for the rise from 2.7% in April.
Food inflation leapt to 4.3% in May from 3.5% in April, reaching the highest since April 2012.
Fresh food prices were the most affected by rising costs, with farmers reporting that they were struggling to cope with the rising cost of labour since Brexit and the escalating price of fertiliser since Russia’s invasion of Ukraine.
The cost of fresh food jumped by 4.5% while ambient food, such as store-cupboard staples, rose by 4% for the month.
“Retail prices edged up further as commodity, energy and transport costs continued to climb,” said BRC boss Helen Dickinson.
“It is likely to get worse before it gets better for consumers with prices continuing to rise and a further jump in energy costs coming in October.”
Food prices have often fallen in previous years keeping the general consumer prices index (CPI) measure of inflation in check.
However, the Office for National Statistics (ONS) said the rising cost of food played a large part in CPI hitting a 40-year high of 9% in April.
Dickinson added: “Fresh food inflation hit its highest rate in a decade, with items like poultry and margarine seeing some of the largest increases due to soaring costs of animal feed and near-record global food prices.
Mike Watkins, head of retail and business insight at NielsenIQ, said: “The acceleration in food inflation reflects the fact that retailers can no longer absorb the full extent of increased supply-chain costs now hitting the industry.”
Earlier this week the ONS said a study of supermarket prices showed that budget pasta prices rose 50% in the year to April 2022, with the cost of bread and minced beef also lifting substantially higher.
Meanwhile, the new data showed that non-food prices saw a slowdown in inflation to 2% in May from 2.2% in April.
