Food price inflation has hit its highest rate in over five years, according to a report by the British Retail Consortium (BRC).
The report showed that food price inflation rose to 2.5% in March, up from 1.6% in February. The inflation increase has been attributed to global commodity prices, such as the rise in cereal prices and last year’s bad weather, which saw lower yields in UK crops.
Shop inflation rose to 0.9% in March, up from 0.7% in February, while fresh food inflation rose 1.9% in March, an increase from 1.7% in February. Ambient food inflation increased by 3.4%, up from 1.5% in February and non-food inflation remained at the same level as the previous month.
Food inflation is expected to rise even further due to Brexit’s impact on retail, which could see higher import costs and lack of availability.
BRC chief executive Helen Dickinson OBE said: “March saw shop price inflation rise to its highest level in six years, driven primarily by a sharp spike in non-perishable food inflation. Increases in global commodity prices and adverse weather events put upward pressures on the wholesale prices of many foodstuffs which, coupled with rises in the cost of alcoholic and non-alcoholic beverages, pushed food inflation from 1.6% in February to 2.5% in March.
“Nonetheless, the bigger threat to food inflation, remains the risks of a chaotic no deal Brexit, which would lead to higher prices and less choice on the shelves. In order to avoid this scenario, parliamentarians from all parties must find a compromise that can command a majority in the House of Commons.”
Retailer and Business Insight head Mike Watkins said: “The upwards pressure on pricing continues across food retailing and a key driver this month was inflation in ambient food and drink. With shoppers looking to stretch their budget for the weekly grocery shop this will not help volume growth, which has been slowing since the start of the year. For many high street fashion, home and outdoor retailers prices are not increasing, so good news for shoppers as the end of season ranges sell through.”