Food inflation has accelerated as commodity prices surge and fuel bills continue to rise.
Overall shop price inflation increased to 2.9 per cent in June from 2.3 per cent in May, while food inflation accelerated to 5.7 per cent in June from 4.9 per cent in May, according to the British Retail Consortium-Nielson Shop Price Index for June.
Non-food inflation rose to 1.3 per cent in June from 0.8 per cent in May.
BRC director general Stephen Robertson said: “Household budgets are under pressure. Real disposable incomes have dropped the most in 34 years but increasing petrol and energy bills plus low wage rises are the main causes. Shop prices are going up much more slowly than the wider Consumer Price Index.
“Overall shop price inflation is being driven by surging world commodity prices, the effect of the weak pound on import costs and higher VAT - all beyond retailers’ control.”
Food inflation is up, but 39 per cent of grocery spending is going on promoted goods, showing there are lots of offers available and savvy shoppers are taking advantage to minimise the impact on bills, the BRC said.
Mike Watkins, senior manager for retailer services at Nielsen, said: “Retailers have responded [to inflation] by maintaining the historically high level of promotions, which is helping shoppers to cope with falling household income.”
