Retail inflation “to get worse before it gets better”
Period Covered: 02 – 06 May 2022
Shop Price annual inflation accelerated to 2.8% in May, up from 2.7% in April. This is above the 12- and 6-month average price increases of 0.7% and 1.9%, respectively. This marks the highest rate of inflation since July 2011.
Food inflation accelerated to 4.3% in May, up from 3.5% in April. This is above the 12- and 6-month average price growth rates of 1.7% and 3.2%, respectively. This is the highest inflation rate since April 2012.
Non-Food inflation decelerated to 2% in May, settling down from 2.2% in April. This is above the 12- and 6-month average price increases of 0.2% and 1.3%, respectively. Inflation remains close to the series’ high.
Fresh Food inflation accelerated in May to 4.5%, up from 3.4% in April. This is above the 12- and 6-month average price growth rates of 1.6% and 3.4%, respectively. This is the highest inflation rate since November 2012.
Ambient Food inflation accelerated to 4% in May, up from 3.5% in April. This is above the 12- and 6-month average price increases of 1.7% and 2.8%, respectively. This is the highest rate of increase since January 2013.
Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said:
“Retail prices edged up further as commodity, energy and transport costs continued to climb. Fresh food inflation hit its highest rate in a decade, with items like poultry and margarine seeing some of the largest increases due to soaring costs of animal feed and near-record global food prices. Retailers have been working hard to protect their customers from these rising costs, particularly at a time when households are being impacted by a huge rise in household energy bills.
“It is likely to get worse before it gets better for consumers with prices continuing to rise and a further jump in energy costs coming in October. 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. While many people will welcome the Government’s latest announcement of support, uncertainty in the future of energy prices means they may only provide temporary respite.”
Mike Watkins, Head of Retailer and Business Insight, NielsenIQ, said:
“The acceleration in food inflation reflects the fact that retailers can no longer absorb the full extent of increased supply chain costs now hitting the industry. Promotions remain close to an all-time low and price cuts rather than volume-based offers such as multibuy are now the best way for retailers to help their shoppers manage their household budgets.”
