Food inflation in the UK rose from 10.6% in September to 11.6% in October – the fastest rate recorded by the BRC-NielsenIQ Shop Price Index.
Fresh food inflation was the main driver, rising from 12.1% to 13.3%, while ambient food inflation accelerated from 8.6% to 9.4% – with both categories experiencing their fastest rate of increase on record. The BRC highlighted that even the price of basic items was soaring, with the price of a cuppa rising as tea bags, milk and sugar all saw significant rises.
The data showed that overall shop price annual inflation had accelerated to 6.6% in October, up from 5.7% in September, which is also a record since this index started in 2005.
Non-Food inflation rose from 3.3% to 4.1% as both retailers and manufacturers battle significant input cost pressures related to rising commodity and energy prices, and a tight labour market.
The BRC noted that while some supply chain costs are beginning to fall, this is being more than offset by the cost of energy, meaning a difficult time ahead for retailers and consumers.
“With Christmas fast approaching, customers are looking for any sign of respite, but it is increasingly difficult for retailers to shoulder the ongoing supply chain pressures,” said Helen Dickinson, Chief Executive of the British Retail Consortium.
She called on the Government to reduce the cost burden on retailers by freezing business rates, highlighting that they faced an additional £800m bill in 2023.
Speaking on BBC Radio 4’s Today programme, Andy Clarke, the former Chief Executive of Asda, warned that Britain faces a tough winter.
“We’re seeing inflation numbers at over double-digit. There’s nothing we can see in the near term that suggests it’s going to go south of that. If anything, it’s going to go up,” he said.
Clarke noted that Christmas will be challenging for many households already facing high fuel and energy bills.
“Everyone wants to enjoy Christmas but you’ve got to take a view that certainly for the next three to six months we’re not going to see any rapid decline in inflation … It’s going to be a tough winter, and food inflation is clearly adding to the burden for families.”
Richard Walker, the Managing Director of Iceland, also warned of further price rises. He told Today: “I’ve got cost prices currently on the table from big branded suppliers that we haven’t stomached yet as a business, let alone had to pass on to our customers. So I think it will get worse.”
NAM Implications:
- The real issue is this extra food inflation pressure 10.6% to 11.6%…
- …coming on top of energy price increases still emerging from the pipeline.
- While suffering a double whammy by those attempting to eat more healthily…
- …via Fresh food inflation rising from 12.1% to 13.3%.
- A real ‘Winter of Discontent’ that will inevitably outlast the calendar version…
