Increasing cost of sugar drives shop prices to record in March
Shop price inflation reached a new high in March amid warnings that soaring food costs are yet to peak.
Shop prices are now 8.9% higher than they were a year ago, up from February’s 8.4% increase, according to the British Retail Consortium (BRC)-NielsenIQ index.
Overall food inflation accelerated to 15%, up from 14.5% last month, while the price of fresh food is now 17% higher than last March – the highest rate on record.
The increasing cost of sugar coupled with high manufacturing costs contributed to price rises for chocolate, sweets and fizzy drinks, while fruit and vegetable prices also rose as poor harvests in Europe and North Africa limited availability.
Inflation on items other than food also reached a new record of 5.9%, up from 5.3% in February.
BRC chief executive Helen Dickinson said: “Shop price inflation has yet to peak.
“Food price rises will likely ease in the coming months, particularly as we enter the UK growing season, but wider inflation is expected to remain high.”
Mike Watkins, head of retailer and business insight at NielsenIQ, said: “Inflation continues to have an impact on the spending power of shoppers and increased energy bills from April will add more pressure.
“Since food prices have risen retailers have seen more visits but less basket spend, as shoppers manage their weekly food bills by shopping little and more often and seeking out the lowest prices.
“And as Easter approaches some high street retailers will also be offering discounts and promotions to encourage customers to spend.”
Last week the Office for National Statistics reported that UK inflation shot up unexpectedly from 10.1% in January to 10.4% in February as the vegetable shortages pushed food prices to their highest rate in more than 45 years.