Retail

UK Fresh Food Prices Rise 13.3% In Year To October, Says BRC

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The cost of fresh food in British shops last month was 13.3% higher than a year earlier, the biggest annual increase in records going back to 2005, the British Retail Consortium (BRC) has said.

The BRC said its broader measure of shop price inflation picked up to 6.6% in October from 5.7%, while food prices overall rose 11.6%, as the cost of less perishable foodstuffs rose more slowly than prices for fresh items.

"It has been a difficult month for consumers who not only faced an increase in their energy bills, but also a more expensive shopping basket," BRC chief executive Helen Dickinson said. "Prices were pushed up because of the significant input cost pressures faced by retailers due to rising commodity and energy prices and a tight labour market."

A 40-Year High

Britain's official measure of consumer price inflation - which covers a wide range of goods and services including soaring energy bills - returned to a 40-year high of 10.1% last month, and the Bank of England expects it will peak this month at nearly 11%.

Outsize rises in the cost of food have come under particularly close attention, and some anti-poverty and anti-obesity charities have reported that shoppers are turning to more calorific processed foods to save money.

Property Taxes

The BRC said retailers were under pressure from rising energy bills, staff costs and commodity prices, and urged the government to freeze a planned £800 million rise in business property taxes, which shops would pass on to customers.

"While some supply chain costs are beginning to fall, this is more than offset by the cost of energy, meaning a difficult time ahead for retailers and households alike," Dickinson said.

Mike Watkins, head of retailer and business insight, NielsenIQ, added, “External factors are keeping shop price inflation at record highs and the challenging economic conditions are significantly impacting consumer confidence and retail spend."

Read More: UK Retailers Report October Rebound But Outlook Bleak: CBI

News by Reuters, edited by ESM. For more retail news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.

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