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Food price inflation surges

07-August-2008, Writes Garnet Roach Garnet@consumerchoices.co.uk

Food price inflation has increased to a record 9.5 per cent over the past year as supermarkets pass on the rising costs of energy and transport.

Last month shop prices rose by 3.2 per cent - the highest jump since the British Retail Consortium (BRC) started the index two years ago - and an increase from 2.5 per cent in June.

This put food prices 9.5 per cent higher compared to July 2007, compared with seven per cent in June.

Although the BRC insisted that retailers were going up faster than the prices on the shelves, Mike Watkins, senior manager, retailer services, Nielsen market research - which carried out the research with the BRC - warned that consumers would have to change the way they spend.

“Latest research from Nielsen indicates that 55 per cent of people are now cutting down on their grocery spend as their other bills increase,” he said. “So, while food inflation increased again in July, savings will need to be made by shopping differently to help pay for the other increases in household spend such as energy and fuel.”

"55% of people are now cutting down on their grocery spend as their other bills increase"

In a markedly difficult decision, the Bank of England is expected to hold interest rates at five per cent today, and experts do not think that a cut will be possible until next year.

Stephen Robertson, BRC director general, offered some hope however. “Our figures show that some non-food goods, including electricals and clothing, are cheaper than they were a year ago,” he said. “Falls in the prices of oil and some world food commodities, such as wheat and soya, provide hope but most retail costs remain sharply up on a year ago and are still rising.”

Chris Eagle, CreditChoices.co.uk commercial manager, said: “Rising food prices make the credit crunch very real and is something that everyone will notice in their weekly shop.

“And as Nielsen suggests, the only real way to combat this is to make changes in the way that you shop. Look online for the best deals, buy two-for-ones and maybe even consider changing your supermarket to a cheaper one,” he suggested.

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I have just bought three loaves of Morrisons value medium 800g sliced bread that last week cost 37p each and today are now 45p each so it would seem that it's not only the utilities companies that are ripping us off.Incidently it's not much more than a year ago that these same loaves cost 25p each.These are the loaves that most less well off people now have to buy.Where do the government get their inflation figuers from? - Aug 28 2008 9:54AM
Barrie Jones, Ross-on-Wye,Herefordshire,U.K.