Food prices set to rise in 2022

Supermarkets

Food prices are set to rise at a “faster rate” this year as retailers continue to suffer from labour shortages and transportation issues.

According to the British Retail Consortium’s Shop Price Index, food prices saw the highest inflation rate since March 2019 with an increase of 2.4% in December, up from 1.1% in November.

This is above the 12- and six-month average price growth rates of 0.3% and 0.6% respectively.

Fresh food prices saw the sharpest rise in December with an annual increase of 3% compared to the same month in 2020, up from 1.2% in November. This marked the highest inflation rate in fresh food in over 8 years.

The Index revealed, ambient food inflation rose to 1.7%, up from 0.9% in November, which is above the 12- and six-month average price increases of 1.0% and 0.9%, respectively.

READ MORE: 85% of customers expect food prices to rise next year

“Not only did prices rise, but did so at a faster rate, especially in food,” British Retail Consortium chief executive Helen Dickinson OBE said.

“Food prices were falling earlier on in 2021, but the acute labour shortages across supply chains, amongst other factors, led to the year ending with a notable increase.

“Fresh food saw the largest rate of inflation in almost a decade. Year-on-year non-food products were deflationary, but prices rose across the board on the previous month.”

Dickinson added: “Retailers can no longer absorb all the cost pressures arising from more expensive transportation, labour shortages, and rising commodity and global food prices.

“Consumers will already be harder pressed this year, with rising energy bills, the looming hike in national insurance, and more expensive mortgages.

“Government should relieve some of these costs by looking for long-term solutions for resolvable issues such as labour shortages.”

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