Food inflation climbs to a record high in British shops
FOOD inflation in United Kingdom stores jumped to a record high last month with retailers warning of another year of elevated prices.
The British Retail Consortium said Wednesday that food inflation “accelerated strongly” to 13.3 percent in December, from 12.4 percent the previous month, an all-time high for the index which started in 2005.
“2023 will be another difficult year for consumers and businesses as inflation shows no immediate signs of waning,” said BRC Chief Executive Officer Helen Dickinson. She cited ongoing pressures from the war in Ukraine pushing up the cost of animal feed, fertilizer and energy.
The cost of fresh food rose 15 percent from a year earlier, also a record high, up from 14.3 percent in November.
Still, overall inflation in UK stores dipped in December, marking the first decline in over a year. The BRC said shop price inflation decelerated to 7.3 percent, down slightly from November’s record high of 7.4 percent.
The leveling off in prices overall was due to retailers heavily discountingstock in the run-up to christmas to shift excess inventory. Many stores orderedproducts earlier in the year when supply-chain problems still meant long waiting times and before rising inflation began to hurt spending.
The BRC was quick to warn that the dip in prices doesn’t signal an end to spiraling inflation and that retailers may have to put their prices up even more from April once the government’s support on energy bills expires.
UK retailers started discounting earlier than usual last year to entice shoppers to spread out their Christmas spending. Department store John Lewis Partnership Plc and drugstore chain Boots both began offering seasonal deals beginning in early November.
Larger-than-normal discounts may have squeezed retailers’ margins and trading updates this month will reveal by how much. Retail bellwether Next Plc is set to kick off the post-christmas earnings season on Thursday.
The first months of the year are likely to be bleak as shoppers face credit card bills for their December spend and as energy bills come due. Consumers will prioritize spending on groceries, which are rising in price, while non-essentials like fashion and homewares are likely to suffer, according to Mike Watkins, head of retailer and business insight at Nielseniq, which produces the data for the BRC.
“The increase in food inflation is going to put further pressure on household budgets and it’s unlikely that there will be any improvement in the consumer mindset around personal finances in the near term,” he said.
Pacific storms
WHILE California tries to clean up from f loods and mudslides that killed at least one person over the weekend, the next in a series of atmospheric rivers is bearing down on the most populous state in the United States for later this week.
A powerful stream of densely moist air flowing off the Pacific Ocean is forecast to bring 3 to 6 inches (7.6 to 15 centimeters) of rain to a wide area from Eureka to San Francisco Wednesday into Thursday, with some isolated areas receiving as much as 8 inches, said William Churchill, a forecaster at the US Weather Prediction Center. These systems resemble large rivers across the sky and can carry as much water as the mouth of the Mississippi River to locations when they hit.
While they can be deadly, they are also an important part of how California and the US West replenish their water supplies, which have been suffering from a years-long drought that has dried up the Colorado River and parched the landscape.
The heavy downpours will shift into Southern California late Wednesday, adding to the series of deluges that have battered the state in the last week and soaked the ground.
“While this one is the worst thing coming up in the near term, this pattern will probably continue for the next week to two weeks,” said Churchill. “This is not the last.”
A record 5.46 inches of rain fell in downtown San Francisco New Year’s Eve, which capped almost a foot of rain falling through December, according to the National Weather Service. California’s capital Sacramento also received a record 2.37 inches to end 2022. At least one person died in the deluges, according to the Associated Press.
The danger is magnified because the water can trigger mudslides in turn areas burned by recent wildfires, filling a house in seconds.
In addition to the rain, the storms are forecast to bring more heavy snow across the state’s mountain ranges. Localized spots around South Lake Tahoe could get upwards of 3 feet (0.9 meters).