Food price inflation hits record high of 13.3% during ‘challenging Christmas’

‘Unlikely there will be any improvement in the near term’, says expert

Food inflation has accelerated to record levels as millions of households suffered a “challenging Christmas” due to soaring prices, new figures show.

The price of food for shoppers rose by 13.3 per cent in December – up from 12.4 per cent in the previous month and the highest ever recorded for groceries.

Helen Dickinson, chief executive of the British Retail Consortium (BRC), said: “It was a challenging Christmas for many households across the UK.

“Not only did the cold snap force people to spend more on their energy bills, but the prices of many essential foods also rose as reverberations from the war in Ukraine continued to keep high the cost of animal feed, fertiliser and energy.”

Households across the country are braced for a difficult year of rising energy bills, rising inflation and increasing interest rates. Prime minister Rishi Sunak said in his New Year speech that the UK’s problems would not go away in 2023.

More than a third of UK adults would find it difficult or impossible to cover a £20 increase to their monthly outgoings, research by Citizens Advice found.

Polling for the organisation found that 37 per cent of those surveyed would struggle or be unable to do so, with about 25 per cent saying they would find it “somewhat difficult”, 7 per cent “very difficult” and 4 per cent “impossible”.

The charity said people are being forced to take increasingly desperate measures to get by, such as eating cold meals. It supported a record number of people in December, helping them access emergency grants and referring them to food banks.

Ms Dickinson added: “Non-food price rises eased as some retailers used discounting to shed excess stock built up during the disruptions to supply chains, meaning some customers were able to bag bargain gifts.

“The combined impact was that price increases overall plateaued, with the reduction in non-food inflation offsetting the higher food prices.”

The rise comes as the latest BRC-NielsenIQ shop price index showed a slight sign of respite for cash-strapped shoppers, as overall shop price inflation eased slightly to 7.3 per cent for the month.

It pulled back marginally from 7.4 per cent in November but remains close to record highs.

Fresh food inflation leapt to 15 per cent for the month from 14.3 per cent in November, while the price of ambient food, such as pasta and tinned food, increased 11 per cent in December against the same month a year earlier.

However, non-food shops, such as fashion or homeware retailers, saw inflation slow to 4.4 per cent in December from 4.8 per cent a month earlier due to price cuts.

Mike Watkins, head of retailer and business insight at NielsenIQ, said: “Consumer demand is likely to be weak in Q1 due to the impact of energy price increases and for many, Christmas spending bills starting to arrive.

“So the increase in food inflation is going to put further pressure on household budgets and it’s unlikely that there will be any improvement in the consumer mindset around personal finances in the near term.

“With shoppers having less money to spend on discretionary retail, having paid for their essential groceries, there will be little to stimulate demand across the non-food channels.”