According to the latest sector data, UK shop prices rose at their highest rate in 18 years, even though food prices grew marginally slower.
The British Retail Consortium said that the cost of items in shops rose by 9 percent annually in May, compared to 8.8 percent in April. This is the highest increase since the British Retail Consortium began keeping records in 2005.
In May, the food inflation rate fell to 15.4%, from a record high of 16.7% in April.
Since the full-scale Russian invasion of Ukraine, in February 2022, global energy and food costs have risen dramatically.
Helen Dickinson is the BRC’s chief executive. She said, “While overall, shop price inflation has increased slightly, it was not a significant increase.” . . “Households will be happy to see the food inflation begin to decline”.
She said that lower energy costs and commodity prices are starting to filter down through the supply chain and reducing inflation for some staples such as butter, milk and fruit. The high cost of commodities like coffee and chocolate has led to a rise in their prices. This pushed the inflation rate for ambient foods — those that can be kept at room temperature — up to 13.1% in May from 12.9% in the previous months.
The poorest households are the hardest hit by food inflation because they spend more of their budgets on necessities.
Mike Watkins is the head of NielsenIQ’s retail and business insights, which compiles the data. He said that shoppers are looking for seasonal offers and supermarket loyalty schemes to help them cope with the rising costs of living.
Last week, data published by the USDA showed that sales of food had fallen 2.7% below pre-pandemic levels in February 2020 as consumers reduced their purchases due to rising prices.
BRC reported that the inflation rate for non-food items rose to 5.8% in May from 5.5 percent in April, despite retailers offering deep discounts on books, footwear and home entertainment.
BRC data showed that food and non-alcoholic drinks continued to grow at a high rate.
According to data released by the Office for National Statistics last week, the official inflation rate for food was 19.1 percent for April. This is only a slight decrease from the 45-year high 19.2 percent registered the month before.
The Bank of England is expected to increase rates in order to reduce inflation.