Food sales rose by 9.8% in June and 10.1% on a like-for-like basis, despite consumer confidence remaining “fragile”.
According to the British Retail Consortium, total retail sales also increased 4.9%, against a decline of 1% in June 2022.
BRC chief executive, Helen Dickinson OBE, said this uptick in sales came “as hot weather prompted purchases of summer essentials”, such as barbecue food.
“With headline food inflation easing for two months in a row as prices of essentials start to fall thanks to stiff competition and consumers continuing to shift shopping patterns to mitigate as much inflation as they can, confidence could improve,” she added.
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However she said that “costly reforms” to the packaging levy and the upcoming deposit return scheme are “putting an inflationary £4bn burden on retailers” and could “derail” retailers’ efforts to bring down prices.
“A hike to business rates is also on the cards for next April. The government must look at how these costly policies will impact inflation and consumers and think again.”
KPMG UK head of retail, Paul Martin, describes food inflation as “the wild card”, adding that it remains stubborn and is having a negative impact on consumers’ ability to spend on non-essential items.
“Consumers have so far remained resilient, but the triple threats of further interest rate hikes, resolute double digit food inflation and an economy recovering at slower rate than predicted, could hamper a return to much needed profitable growth across the retail sector.”