Food prices continued to rise in August on the back of the hot, dry summer reducing supply of some UK products, although retailers have shielded consumers from higher price increases, according to the British Retail Consortium (BRC).
The latest BRC-Nielsen shop price index revealed that food inflation accelerated to 1.9% in August from July’s rate of 1.6%, as overall shop prices rose for the first time in over five years – by 0.1%, up from the July decrease of 0.3%.
Fresh Food inflation increased by 1.5%, up from 1.2% in July, while ambient food inflation rose to 2.5% in August from 2.2% in the previous month.
The increases in the prices of oil and agricultural products on global markets earlier in the year also contributed to food price rises, BRC-Nielsen said.
BRC chief executive Helen Dickinson warned that current price rises “pale in comparison” to potential increases in costs retailers will face in the event the UK leaves the EU without a deal.
“If that does happen retailers will not be able to shield consumers from price increases,” she added.
Nielsen’s head of retailer and business insight, Mike Watkins, said it was no surprise shop price inflation was higher this month.
“With the recent hot summer weather, shoppers have been visiting food stores more often and purchasing more food and drink, with promotional offers helping to limit the impact of some cost increases coming through the supply chain,” he said.
“The challenges for the high street are different with less opportunity to stimulate demand. However, compared to the recent increase seen in the CPI, there is still limited inflationary pressure coming from retail at the moment.”
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