// Shop prices hit their highest level in more than a decade last month, driven by soaring food inflation
// BRC chief executive Helen Dickinson OBE warned that inflation will get worse before it gets better
Food inflation has spurred the highest shop prices in more than a decade in May, as the BRC warns that things will get worse before it gets better for consumers.
Shop price inflation accelerated to 2.8% in May, up from 2.7% in April, which marks the highest rate of inflation since July 2011, according to the BRC-Nielsen Shop Price Index.
Product prices increased as retailers battled with climbing commodity, energy and transport costs.
Food was the big driver of rising shop prices, up 4.3% in May, a big jump from the 3.5% in April.
Fresh food prices were 4.5% higher year on year, while ambient food jumped 4%. BRC chief executive Helen Dickinson OBE said that items like poultry and margarine saw some of the largest price increases due to the soaring cost of animal feed and near-record global food prices.
Meanwhile, prices in non-food decelerated from 2.2% in April to 2% last month, although it remains significantly higher than the 12-month average of 0.2%.
Dickinson added: Retailers have been working hard to protect their customers from these rising costs, particularly at a time when households are being impacted by a huge rise in household energy bills.
READ MORE: Asda criticises government for being too slow to react to inflation
“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. 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.”
NielsenIQ head of retailer and business insight Mike Watkins said the increase in prices reflected that retailers can no longer absorb the supply chain costs that are 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,” he added.
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