Food inflation driven by commodity hikes

Food inflation driven by commodity hikes

UK food prices increased by 4.7% in April, new research has revealed.

The jump in food prices offset a fall in non-food retail price inflation, which slowed to 1.2% in April, the latest pricing index released today (4 May) by the British Retail Consortium and Nielsen showed.

Total inflation was up 2.5% in the month, showing a marginal increase on March's inflation level of 2.4%.

Commenting on the high level of food inflation, BRC director general Stephen Robertson said that prices were driven up by rising commodity costs, which are being passed along to consumers.

"The upward pressures on food prices, which eased in March, bit back in April. The cost of world commodities, including sugar and wheat, rose even more quickly, inevitably working through to some shop prices," he commented.

According to Robertson, in an effort to ease the pressure of rising food costs, retailers are increasing their levels of promotional activity in the grocery aisle.

According to the BRC and Nielsen, around 40% of groceries currently purchased are on discount.

Nevertheless, despite the rise in discounting Nielsen analyst Mike Watkins said that higher inflation is likely to continue to put household budgets under pressure.

"With higher inflation likely to be with us for the near future, shoppers need to make the most of their more limited budgets and this will include looking for further savings when shopping. Supermarkets have responded by maintaining the highest-ever levels of promotional offers on groceries," he commented.