Food inflation has accelerated to record levels in the UK, rising to 13.3 per cent in December, up from 12.4 per cent in the previous month
There was a slight sign of respite for cash-strapped shoppers, as overall shop price inflation eased slightly to 7.3 per cent for the month, according to the latest data from BRC-NielsenIQ.
Although it remains close to record highs, shop price inflation pulled back marginally from 7.4 per cent in November.
“It was a challenging Christmas for many households across the UK,” said Helen Dickinson, chief executive of the British Retail Consortium.
“Not only did the cold snap force people to spend more on their energy bills, but the prices of many essential foods also rose as reverberations from the war in Ukraine continued to keep high the cost of animal feed, fertiliser and energy.”
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Fresh food inflation leapt to 15 per cent for the month from 14.3 per cent in November, while the price of ambient food, such as pasta and tinned food, increased 11 per cent in December against the same month a year earlier.
However, non-food shops, such as fashion or homeware retailers, saw inflation slow to 4.4 per cent in December from 4.8 per cent a month earlier due to price cuts.
“Non-food price rises eased as some retailers used discounting to shed excess stock built up during the disruptions to supply chains, meaning some customers were able to bag bargain gifts,” added Ms Dickinson.
“The combined impact was that price increases overall plateaued, with the reduction in non-food inflation offsetting the higher food prices.”
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“Consumer demand is likely to be weak in Q1 due to the impact of energy price increases and for many, Christmas spending bills starting to arrive,” said Mike Watkins, head of retailer and business insight at NielsenIQ.
“So the increase in food inflation is going to put further pressure on household budgets and it’s unlikely that there will be any improvement in the consumer mindset around personal finances in the near term.
“With shoppers having less money to spend on discretionary retail, having paid for their essential groceries, there will be little to stimulate demand across the non-food channels.”