Shop prices rise at highest inflation rate for 14 years

SHOP prices have hit their highest rate of inflation in almost 14 years as businesses grapple with soaring supply chain costs and a cut in household spending, figures show.

Prices were up 3.1% on a year ago in June, up from 2.8% in May – the highest rate of inflation since September 2008, according to the BRC-NielsenIQ Shop Price Index.

Food inflation jumped to 5.6% in June, up from 4.3% in May, driven by fresh food prices up 6.2% on June last year – the highest inflation rate since May 2009.

The figures follow the Office for National Statistics reporting that inflation as measured by the consumer prices index rose from 9% in April to 9.1% last month, a level unseen since February 1982, amid record prices for petrol and the soaring cost of food.

British Retail Consortium (BRC) CEO Helen Dickinson said: “Last month households and businesses were hit by the highest rate of inflation since the 1980s as nearrecord commodity prices in energy, transport and food filtered through the supply chain. Food prices rose sharply, particularly for fresh foods such as cheese which has been affected by the spiralling costs of fertiliser and animal feed.

“As households face the biggest real terms cut in income since at least the 1970s and businesses grapple with upstream supply chain costs, retailers remain focused on protecting their customers. Fierce competition means that retailers will continue to absorb as much of these costs pressures as possible and look for efficiencies in their businesses. Supermarkets are also expanding their value ranges to offer a wider choice for customers trading down and providing discounts to vulnerable groups.”