Food prices still rising as retailers pass on costs

 
Helen Cahill
Follow Helen
General View Of Morrisons Supermarket
Source: Getty

Grocery prices continued to rise last month as supermarkets passed on higher costs to consumers.

Food prices rose by 2.2 per cent in October, according to figures from the British Retail Consortium (BRC), the same level of inflation recorded in September.

However, prices on non-food products continued to decline, down by 1.5 per cent year-on-year. The BRC said this was due to a rise in promotional activity as retailers tried to clear stock.

Read more: Real Good Food shares go past their sell-by date as butter prices climb

"This month's figures only serve to illustrate the enormous challenges of the current environment," said Helen Dickinson, chief executive of the British Retail Consortium.

"And while retailers are doing their best to provide value to keep prices low for consumers who are feeling the pinch of falling real wages, in an industry where margins are already low, the capacity to absorb further cost increases is wearing thin."

Food and transport costs have boosted the UK's overall rate of inflation to its highest rate since 2012. For workers, this has meant a fall in real wages.

The Bank of England's governor Mark Carney has said inflation is likely to peak before the end of the year. However, there is already evidence of shoppers tightening the purse strings ahead of Christmas, the most important sales period for retailers. Data from the Confederation of British Indsutry found that in October retail sales fell at the fastest rate since the height of the financial crisis.

Related articles