The retail price of food rose by 9% during March when compared with the same month last year, according to the latest figures from the British Retail Consortium (BRC).
The 9% increase – the second consecutive month in which food prices have increased by that figure – drove a 2% rise in overall retail prices during the month. Non-food prices fell by 1.5%.
Stephen Robertson, BRC director general, said: “The shop price of food is increasing because retailers are paying more for their supplies. The majority of food consumed in the UK is sourced here, but the weak pound is pushing up prices for domestic produce as it becomes more attractive to overseas buyers and it’s increasing the cost of imports. The pound has fallen by around a quarter since summer 2007.
“The good news for customers is food inflation is lower than its peak last year and non-food goods, such as clothing and electricals, are also still cheaper than they were a year ago.”
Mike Watkins, senior manager, retailer services at Nielsen said: “The impact of currency changes continues to stoke up shop prices for food and, in recent weeks, for non-food.
“While demand for food and drink is relatively strong, with sales in the first quarter up at the grocery multiples, this was only achieved by unprecedented levels of promotions. In non-food retailing, shoppers remain much more cautious and there is once again significant discounting in the run-up to Easter.”
While the price of ambient food increased to 8.1% (from 7.1% in February) it was offset by fresh food price inflation falling to 9.6% (from 10.2% in February).
A large proportion of the increase in fresh can be attributed to the farm gate price of fresh meats and dairy increasing year-on-year. The price of vegetables also posted a strong rise, due in part to the significant proportion that is imported from the eurozone during the winter.
Ambient foods have also been affected by exchange rate movements. A large proportion of ingredients in ready-made meals are often sourced from abroad.
