UK retailers raise prices by most since July 2011 - BRC

·2-min read
FILE PHOTO: People walk on a shopping street in London, Britain

By David Milliken

LONDON (Reuters) - British retailers raised prices at the fastest pace in more than a decade last month, driven by the rapidly rising cost of food and increased energy and transport costs for stores, an industry body said on Wednesday.

The British Retail Consortium (BRC), which represents supermarkets and other large retail chains, said average prices among its members last month were 2.8% higher than a year earlier, the biggest annual increase since May 2011.

The BRC's measure of inflation covers a narrower range of goods than Britain's official consumer prices index, which showed inflation hit a 40-year high of 9.0% in April off the back of surging energy prices and post-COVID bottlenecks.

Market researchers NielsenIQ said on Tuesday that British shoppers were visiting a greater number of supermarkets to seek out the cheapest groceries.

Food prices on the BRC's measure were up 4.3% on the year in May compared with a 3.5% rise in April, making it the largest food price rise since April 2012. Non-food prices rose 2.0%.

"Items like poultry and margarine (are) seeing some of the largest increases due to soaring costs of animal feed and near-record global food prices," BRC chief executive Helen Dickinson said.

Russia's invasion of Ukraine has interrupted exports of grain and vegetable oil, on top of pushing up energy prices which had already leapt before the war began in February.

Last month the Office for National Statistics said food and non-alcoholic drink prices rose 6.7% in the year to April, a bigger increase than the BRC. ONS data covers a wider range of food stores than the BRC and does not include 'buy one, get one free' offers.

Dickinson said shops were likely to increase prices further later this year, when the BoE predicts consumer price inflation will exceed 10%.

"With little sign that the cost burden on retailers will ease any time soon, they will be left with little room for manoeuvre, especially those whose supply chains are affected by lockdowns in China and the war in Ukraine," she said.

(Reporting by David Milliken, editing by Andy Bruce)

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