Shop price inflation hit levels not seen since 2008 in June, research published on Wednesday showed.
According to the latest BRC-NielsenIQ Shop Price Index, shop price inflation was 3.1% in June, up from 2.8% in May. The annual rate was well above the 12 and 6-month averages, of 1.0% and 2.3%, respectively, and was the highest since September 2008.
Within that, food inflation jumped from 4.3% in May to 5.6% – the highest since June 2011 – and non-food to 1.9%, down marginally on last month’s 2.0%. Fresh food inflation was 6.2% and ambient food inflation 4.8%.
Helen Dickinson, chief executive of the British Retail Consortium, said: “Last month, households and businesses were hit by the highest rate of inflation since the 1980s, as near-record commodity prices in energy, transport and food filtered through the supply chain.
“Food prices rose sharply, particularly for fresh foods such as a cheese, which has been affected by the spiralling costs of fertiliser and animal feed.
“As households face the biggest real terms cut in income since the 1970s, and businesses grapple with upstream supply chain costs, retailers remain focused on protecting their customers. Fierce competition means retailers will continue to absorb as much of these cost pressures as possible.”
Mike Watkins, head of retailer and business insight at NielsenIQ, said: “While 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 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 the prices are the lowest.”
The UK is facing a growing cost of living crisis, with inflation at a 40-year high of 9.1%. On Tuesday, NielsenIQ said total till grocery sales at UK supermarkets had risen 1.5% in the four weeks to 18 June, but volumes sales had fallen 5.5% as shoppers looked to manage their basket spend.