Yahoo Finance UK shop prices to rise as retail inflation hits highest since 2011
UK consumers face additional hikes in shop prices after retail inflation edged up further as commodity, energy and transport costs continued to climb last month.
Analysis from the British Retail Consortium (BRC) showed shop price annual inflation accelerated to 2.8% in May, up from 2.7% the month before — the highest rate since July 2011.
Food inflation increased to 4.3% from 3.5% the month prior, the highest since April 2012, particularly at a time when families are impacted by a huge rise in household energy bills.
According to the data, fresh food prices surged the most during the month, hitting the highest level since November 2012 to 4.5% from 3.4%.
Products including poultry and margarine saw some of the largest increases due to soaring costs of animal feed and near-record global food prices.
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The prices of shelf-stable food including tinned products ambient food pushed to 4%, up from 3.5% in April, climbing above the 12- (1.7%) and 6-month (2.8%) rate respectively.
Non-food prices were the only items that fell, settling down to 2% versus 2.2% the month before.
"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," said Helen Dickinson OBE, CEO of the BRC.
"With little sign that the cost burden on retailers will ease any time soon, they will be left with little room for manoeuvre, especially those whose supply chains are affected by lockdowns in China and the war in Ukraine."
"While many people will welcome the government’s latest announcement of support, uncertainty in the future of energy prices means they may only provide temporary respite."
Last week, chancellor Rishi Sunak announced a £15bn package to help alleviate the strain on household energy bills, funded partly by a controversial windfall tax on gas and oil giants.
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Mike Watkins, head of retailer 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.
"Promotions remain close to an all-time low and price cuts rather than volume-based offers such as multibuy are now the best way for retailers to help their shoppers manage their household budgets."
