Fresh food inflation continues despite fall in overall shop prices
The price of fresh food has continued to climb despite a broader softening in inflation at UK shops, according to new data.
Fresh food inflation increased to 4.3 per cent year on year in October, against growth of 4.1 per cent in September and above the three-month average of 4.2 per cent, according to the British Retail Consortium (BRC).
Harsh weather and disease, amongst other supply change issues, have been pushing up the price of fresh meat this year.
The price of beef has risen by a quarter in the last year, while coffee prices have risen about a fifth and chocolate is up 17 per cent.
Despite the ongoing problem in fresh food production, overall food inflation decreased to 3.7 per cent year on year in October, down from 4.2 per cent in September.
Helen Dickinson, chief executive of the BRC, attributed the slowdown to “fierce competition amongst retailers and widespread discounting”.
Shop price inflation slows
Shop price inflation, which includes food and non-food prices, decreased to 1 per cent year on year in October, down from 1.4 per cent in September.
This represents a year-on-year drop in real prices, with annual wage growth at 4.7 per cent in the year to October.
Dickinson said that discounts “came early to electricals and health & beauty, as retailers started promotions ahead of Black Friday month”.
Mike Watkins, head of retailer and business insight at NIQ, said that businesses are in a “battle for market share”.
“Many are offering targeted price cuts, and non-food retailers will wish to avoid any price increases over the next couple of months,” Watkins said.
Dickinson warned Chancellor Rachel Reeves about increasing taxes in the upcoming Autumn budget, arguing that adding further taxes on retail businesses would “inevitably keep inflation higher for longer.”
Last week, supermarkets called on Chancellor Rachel Reeves to ‘bring inflation to heel’, sounding the alarm on the “disproportionate tax burden” that retailers face.
“With the Budget less than a month away, the Chancellor has an opportunity to relieve some of the pressures that are keeping the cost of essentials high.
“Labour’s promised business rates reform must deliver a meaningful cut to retailers’ rates bills, and ensure that no store pays more,” Dickinson said.