Commodities still driving up food costs
FOOD prices at UK stores rose again last month, the British Retail Consortium (BRC) revealed today.
Food costs were 4.9 per cent higher than in May 2010, up from April’s annualised food inflation rate of 4.7 per cent.
Soaring prices of fresh foods were the main driver, with year-by-year inflation jumping to 4.2 per cent, from April’s rate of 3.3 per cent.
Fresh food was half a percentage point more expensive than in April.
“Recent volatility in the cost of key commodities, linked to dry weather and global demand, is now working through to the shop price of some food,” explained Stephen Robertson of the BRC.
Corn and wheat are up 112 per cent and 72 per cent respectively compared to the same time last year, the BRC report said.
“Rising gas and electricity prices are pushing up costs at every stage of the supply chain,” Robertson added.
Price pressures across the economy, combined with the squeeze of high taxes and below-inflation wage rises, are actually forcing some other shop prices down, the BRC has found.
Non-food sales slipped 0.2 per cent in May compared to April, just 0.8 per cent above last year’s level. Overall, shop prices were 2.3 per cent higher than last year, down from 2.5 per cent in April.
The BRC will today launch a vigorous defence of large retailers. Big stores “bring the footfall so desperately needed” to high streets, it will say.