Coffee beans and ready meals send food inflation soaring yet again – and peak is yet to come
Food inflation reached new highs in April soaring 15.7 per cent, according to new data, with the cost of convenience food such as ready meals and coffee beans increasing due to supply chain woes.
While shop price inflation fell slightly by one per cent in the month to 8.8 per cent, food prices remained at record highs, largely due to pressures in the supply chain, figures by the British Retail Consortium (BRC) revealed.
Fresh food inflation, such as vegetables and fruits accelerated 17.8 per cent up from 17 per cent in March, the highest inflation rate in the fresh food category on record.
Moreover, food inflation accelerated to 15.7 per cent in April, up from 15.0 per cent in March and ambient food, such as canned soups and vegetables soared to 12.9 per cent in April, up from 12.4 per cent in the previous month.
“Food prices remained elevated given ongoing cost pressures throughout the supply chain,” Helen Dickinson, chief executive of the BRC said.
Food inflation is yet to peak
Mike Watkins, Nielsen IQ
“The knock-on effect from increased production and packaging costs meant that ready meals became more expensive and coffee prices were also up due to the high cost of coffee beans, as well as key producer nations exporting less,” she added.
It comes as retailers across the UK have been battling to offer the cheapest selling goods to their customers, largely through loyalty card schemes and price matching offers.
Earlier this month, Sainsbury’s revamped its Nectar card, slashing the prices of hundreds of items in store for card holders to rival Tesco’s clubcard and boost shoppers confidence.
“More retailers have used loyalty schemes or money off promotions to help stimulate sales,” Mike Watkins, head of retailer and business insight, NielsenIQ, said.
However, Watkins warned that with inflation “yet to peak “and sales volumes in decline in many channels, it’s difficult to “second guess the strength of consumer confidence”.
He added: “Given the falls in disposable income we really need to see CPI back into single figures and a slowdown in food inflation to test shoppers` willingness to spend.”