As inflationary pressures reach home, households and businesses must prepare for a challenging moment, according to the chief executive of the British Retail Consortium.
According to recent data, the rate of inflation in retail prices jumped to 4.4% in July, up from 3.1% in June.
The increase is the greatest since 2005 when the British Retail Consortium began its index.
Compared to June, food inflation increased by 7 percent, up from 5.6 percent. This was partially attributable to an 8% increase in the price of fresh foods, up from 6.2% in June.
Non-food inflation reached 3%, up from 1.9% in June – a record high, surpassing the previous record set in April of 2.2%.
The British Retail Consortium’s chief executive, Helen Dickinson, stated: “Rising production costs – including the price of animal feed and fertilizer as well as the availability of produce, which was exacerbated by the conflict in Ukraine – and exorbitant land transport costs caused a 7 percent increase in food prices.
“Dairy items, such as lard, cooking fats, and butter, saw some of the greatest price increases. In the meantime, non-food prices were affected by growing shipping costs, production costs, and ongoing unrest in China.
As inflation hits unprecedented heights, retailers are doing everything necessary to absorb as much of these growing expenses as possible, as well as seeking business and supply chain efficiencies.
“As a result of a rise in the cost of living, merchants are expanding their value ranges to offer the greatest choice of products to those in most need, providing discounts to disadvantaged populations, and increasing employee pay.
Despite this, people and companies must prepare for a time of difficulty as inflationary pressures take hold.
NielsenIQ’s director of retailer and business insight, Mike Watkins, stated: “In recent weeks, food and non-food shelf price rises have quickened, as additional cost-price increases have made their way through supply chains, placing a growing strain on the household budgets of consumers.
“As merchants attempt to insulate customers from inflation’s full impact, the grocery business, in particular, is under strong pressure.
“At the same time, there has been an increase in competitive intensity; therefore, customer retention throughout the summer holiday season will be essential to halt any further volume decline.”
