Industry pressure group the British Retail Consortium (BRC) has defended grocery pricing, amid accusations that leading retailers are using inflation as a cover to charge consumers more.
A report published yesterday by investment bank UBS suggested that the annual food inflation rate was currently 4.9 per cent but overall inflation was only increasing by four per cent.
UBS indicated that grocers could face a government probe over unfair prices but the BRC argues that discounts have been ignored in the bank’s figures.
Stephen Robertson, BRC Director General, said: “These statistics from UBS don’t take into account the high level of promotional activity in UK supermarkets. 38 per cent of groceries are now on promotion.
“No-one goes shopping and ignores all of the special offers. It isn’t an accurate reflection of real life.”
Both the rest of Europe and the US currently have much lower annual food inflation rates than the UK according to UBS, with the former at 1.8 per cent and the latter 1.5 per cent.
BRC shop price inflation figures for the last few months have shown retailers swallowing the VAT rise and Robertson believes that retailers are trying to protect consumers from global commodity price rises.
“What matters is not the rate of change of prices but the absolute level of prices,” Robertson argued.
“There’s no question that in the UK, customers pay less for their food than is the case in many other developed countries.
“Food prices have not risen at anything like the same rate as commodity prices. It’s clear that supermarkets are shielding customers from the full impact.”
January’s Shop Price Inflation report, produced by the BRC and research company Nielsen, showed overall shop prices rising 2.5 per cent year-on-year but food inflation was much higher at 4.6 per cent.