Breakfast items getting more expensive - as retail body issues new warning over rising food prices
Food prices are likely to increase even further in the coming months after hikes were recorded in February, the British Retail Consortium has warned.
A new Shop Price Index by the BRC and NielsenIQ found that while shop price inflation was down 0.7 per cent year-on-year in February, food inflation actually increased by 2.1 per cent.
Helen Dickinson, Chief Executive of the BRC, said the situation is likely to become even more challenging in coming months, with food prices now expected to be four per cent higher than 2024 later in this year.
She said: “While shop prices remained in deflation in February, food prices on the month saw the biggest increase in the last year.
"Breakfast, in particular, got more expensive as butter, cheese, eggs, bread and cereals all saw price hikes. Climbing global coffee prices could threaten to push the morning costs higher in the coming months. In non-food, month on month prices rose as January Sales promotions ended, especially in electricals and furniture. But discounting is still widespread in fashion as retailers tried to entice customers against a backdrop of weak demand.
“Inflation will likely rise across the board as the year progresses with geopolitical tensions running high and the imminent £7bn increase in costs from the Autumn Budget and the new poorly designed packaging levy arriving on the doorsteps of retailers.
"We expect food prices to be over four per cent up by the second half of the year.
"If Government wants to keep inflation at bay, enable retailers to focus on growth, and help households, it must mitigate the swathe of costs facing the industry.
"It can start by ensuring no shop ends up paying more than they already do under the new business rates proposals, and delaying the new packaging taxes.”
Mike Watkins, Head of Retailer and Business Insight, NielsenIQ, added: “With many household bills increasing over the next few weeks, shoppers will be looking carefully at their discretionary spend and this may help keep prices lower at non-food retailers.
"However the increase in food inflation is likely to encourage even more shoppers to seek out the savings available from supermarket loyalty schemes.”
The Shop Price Index found Non-Food inflation decreased to -2.1 per cent year on year in February, against a decline of -1.8 per cent in January.
Fresh Food inflation increased to 1.5 per cent year on year in February, against growth of 0.9 per cent in January. Ambient Food inflation increased to 2.8 per cent year on year in February, against growth of 2.5 per cent in January.