UK food prices highest in 14 years

LONDON

Food prices across the UK have hit an all-time high, the British Retail Consortium (BRC) said Wednesday.

According to the consortium, food inflation increased rapidly in August reaching 9.3%, up from 7% last month. This figure represents the highest inflation since August 2008.

“Mounting cost pressures up and down supply chains meant shop price inflation hit a new high in August. The war in Ukraine, and consequent rise in the price of animal feed, fertiliser, wheat and vegetable oils continued to push up food prices,” Helen Dickinson, CEO of the consortium, said in a statement.

“Fresh food inflation in particular, surged to its highest level since 2008, and products such as milk, margarine and crisps saw the biggest rises. The rise in shop prices is playing into wider UK inflation, which some analysts are predicting could top 18% in 2023,” she added.

In the same period, shop price annual inflation rose to 5.1%, up from 4.4% in July 2022 and is above the 3-month average rate of 4.1%. As such, this is the highest shop price inflation rate recorded since the index was created in 2005.

Non-Food inflation, however, declined to 2.9%, down from 3% in July. Nonetheless, this remains above the 3-month average rate of 2.6% and inflation in this category remains in the ‘high’ category of the index.

Fresh food inflation has experienced a rapid rise with August recording 7.8%, a significant increase from last month's 5.7%.

“Inflation continues to accelerate and shoppers are already cautious about how much they spend on groceries, with a fall in volume sales at supermarkets in recent months,” said Mike Watkins, head of retailer and business insight at NielsenIQ.

“We can expect this level of food inflation to be with us for at least another six months but hopefully some of the input cost pressures in the supply chain will eventually start to ease,” Watkins added.

Representatives of the UK food industry have warned that with falling disposable incomes brought on by the cost of living and energy crisis, national retail prices could continue rising for the foreseeable future.