Food price inflation in the UK has surged again, marking its sixth consecutive month of increase. According to the British Retail Consortium (BRC), higher prices for meat and tea are at the forefront of this ongoing rise. As families across the country feel the pressure, the overall cost of food is now 4% higher than last year, surpassing last month’s increase and exceeding the three-month average.
This upward trend is having a significant impact on household budgets, as inflation continues to outpace wage growth. The BRC’s findings are a stark reminder of the increasing strain on finances for many Britons.
Meat and Tea Prices Lead the Charge
The most significant contributors to the recent spike in food inflation are meat and tea. Helen Dickinson, Chief Executive of the BRC, pointed out that wholesale prices for both categories have risen due to tighter global supplies. “Families will have seen their food bills increase as food price inflation rose for the sixth consecutive month,” she said.
For meat, the surge can be attributed to both rising production costs and limited availability, further exacerbated by global supply chain disruptions. Similarly, tea prices have been impacted by both poor harvests and increased demand worldwide.
These price hikes have translated into higher bills at supermarkets, with meat and tea becoming noticeably more expensive for consumers. Fresh food inflation has remained steady at 3.2%, but ambient food prices have risen by 5.1% compared to last year, a noticeable increase from the previous month’s 4.3% rise.
Broader Impact on the Retail Sector
Alongside rising food prices, overall shop price inflation has also increased. It climbed to 0.7% in July, up from 0.4% in June. The rise in retail prices puts further pressure on household budgets, with essential items now taking up a larger portion of consumers’ income.
Mike Watkins, Head of Retailer and Business Insight at NIQ, pointed out that many consumers are finding their household finances increasingly stretched. “Consumers’ household budgets are coming under pressure with food retailers now seeing price increases above the Consumer Price Index (CPI),” Watkins explained.
Despite this, there are some bright spots. Promotional offers in fashion and furniture have provided consumers with some opportunities to save, but these discounts may not be enough to offset the higher costs of groceries. Retailers, however, remain cautious about customer retention, with the summer sales season proving to be a challenging time.
Looking ahead, the BRC’s Dickinson urged the government to carefully consider the impact of future tax increases on consumers. “Further tax rises will ultimately hurt households, locking in inflation and forcing people to pay higher prices to put food on the table,” she concluded.
