Food inflation hit a new record high last month as the average price of food and non-alcoholic beverages saw the biggest increase in over 45 years.
According to the latest BRC-NielsenIQ shop price index, food prices rose by 15.7% and fresh food prices soared by 17.8% year on year.
The price of ambient products saw an increase of 12.9%, while British Retail Consortium chief executive, Helen Dickinson warned that ready meals and coffee had also become more expensive.
She said that food prices remained elevated “given ongoing cost pressures throughout the supply chain.”
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“The knock-on effect from increased production and packaging costs meant that ready meals became more expensive and coffee prices were also up due to the high cost of coffee beans, as well as key producer nations exporting less.”
However, she said that the price of butter and vegetable oils started to come down, with general food prices likely to follow in coming months “as the cut to wholesale prices and other cost pressures filter through.”
Dickinson added that retailers were “committed to helping their customers and keeping prices as low as possible.”
NielsenIQ head of retailer and business insight, Mike Watkins agreed that in recent weeks, “more retailers have used loyalty schemes or money off promotions to help stimulate sales.”
Last month, Sainsbury’s introduced a new loyalty initiative, Nectar Prices to compete with Tesco’s Clubcard scheme and rolled out a new ‘Pocket Friendly Prices’ value campaign across its Local stores.
Asda also followed suit having reintroduced its ‘First Scan Bonus’ for first time users of its loyalty programme, Asda Rewards.
However despite this, Watkins added that “with inflation yet to peak and sales volumes in decline in many channels, it’s difficult to second guess the strength of consumer confidence.
“Given the falls in disposable income we really need to see CPI back into single figures and a slowdown in food inflation to test shoppers’ willingness to spend.”
