Food prices see fastest monthly jump since April last year

Food prices have seen their fastest monthly jump since April last year in an “early sign of what is to come”, latest figures show.

Food prices overall increased by 0.5% between December and January, while the price of ambient food saw a 1% jump as prices spiked for sugary products, chocolates and alcohol, according to figures provided to the PA news agency by the British Retail Consortium (BRC).

Inflation figures show food prices were 1.6% higher in January than a year before, easing from 1.8% in December, according to the BRC-NielsenIQ Shop Price Index.

Fresh food inflation slowed to 0.9%, down from 1.2% in December, while the price of ambient food edged down to 2.5% in January from 2.8%.

While overall shop prices fell in January, the pace of deflation eased to 0.7% from December’s 1%.

BRC chief executive Helen Dickinson said: “Extensive January sales was good news for bargain hunters, with non-food products showing significant discounts, particularly for furniture and fashion, but less good news for retailers needing to shift excess stock.

“This month’s figures also showed early signs of what is to come, with month-on-month food prices rising at their fastest pace since April last year. Ambient food saw a 1% jump as prices spiked for sugary products, chocolates and alcohol.”

Ms Dickinson added: “Price cuts and deflation may not last much longer as retailers will soon feel the full impact of £7 billion of new costs announced at the last Budget.

“Higher employer NICs (national insurance contributions), increased national living wage, and a new packaging levy mean that prices are expected to rise across the board.”

Mike Watkins, head of retailer and business insight at NielsenIQ, said: “Shoppers continue to be unsure about spending and many are seeing a continued squeeze on their household incomes.

“So we expect non-food retailers to still promote and food retailers to still offer price cuts over the next few weeks, with shoppers managing their budgets by shopping smart and shopping around for wherever the savings are the most attractive.”