Food inflation rises by 4.9% in May
Shop price inflation slowed to 2.3% in May from 2.5% in April according to latest figures released by the British Retail Consortium and Nielsen today. However, food inflation increased to 4.9% in May from 4.7% in April.
Non-food inflation slowed to 0.8% in May from 1.2% in April.
Stephen Robertson, BRC director general, said: “Recent volatility in the cost of key commodities, linked to dry weather and global demand, is now working through to the shop price of some food.
“Wheat is up 72 per cent and oil 50 per cent on a year ago while rising gas and electricity prices are pushing up costs at every stage of the supply chain.
“But, even though the VAT rate went up 2.5 percentage points in January, non-food goods are less than one per cent higher than last year – reflecting weak demand and retailers’ need to use promotions and discounts to generate sales.
“Overall shop price inflation fell to 2.3 per cent, almost half the Consumer Price Index, showing rising utility and insurance costs are hitting households much harder than shop prices.”
Mike Watkins, senior manager, retailer services, Nielsen added:
“Food prices have increased slightly this month but this is due to seasonal or weather related fresh foods rather than ambient foods. However, inflation and other rising household bills are still top of mind for shoppers so retailers are offering more promotions and deeper price cuts. This continues to be an important driver of sales for retailers and a coping strategy for shoppers but should not be seen as the long term answer to any weakening of consumer demand or falls in consumer confidence.”
