The rate of price rises at UK supermarkets hit a new high in the year to May, driven by increases in coffee, chocolate, and non-food goods. According to the British Retail Consortium (BRC) and NielsenIQ, overall grocery inflation reached 9% in May, up from previous months.
While fresh food prices have fallen marginally, the cost of commodities such as coffee and cocoa has jumped. Helen Dickinson, chief executive of the BRC, said: 'The price of chocolate and coffee rose off the back of the ongoing high global costs for these commodities.'
The government is in talks about asking supermarkets to voluntarily cap prices on basic food items like bread and milk to help with the cost of living. However, the BRC has dismissed the idea, stating that the government should focus on cutting red tape to keep prices low, rather than 'recreating 1970s-style price controls'.
Overall food inflation ticked lower from 15.7% in April to 15.4% in May, but remains the second highest rate on record. The pace of price rises for non-food goods grew from 5.5% to 5.8%, despite heavy discounts on footwear, books, and home entertainment.
Supermarkets have taken some steps to ease the burden. Sainsbury's cut the cost of more than 40 own-brand products, including cheese, yoghurt, and cream. Rhian Bartlett, its food commercial director, said: 'Whenever we are paying less for the products we buy from our suppliers, we will pass those savings on to customers.'
Despite a recent drop in wholesale gas prices, retailers claim that falling production costs take time to filter through due to long-term contracts. Mike Watkins of NielsenIQ noted: 'Food retailing is competitive, so hopefully the recent price cuts in fresh foods is a sign that inflation has now peaked.'
