The cost of fresh food and the price of steak were the main drivers as food inflation increased to 2.8% year on year in May, against growth of 2.6% in April
Shop price deflation was unchanged at 0.1% year on year in May, against a decline of 0.1% in April said the British Retail Consortium in figures released this morning.
Helen Dickinson, Chief Executive of the BRC, said:
“While overall shop prices remain unchanged in May, food inflation rose for the fourth consecutive month. Fresh foods were the main driver, and red meat eaters may have noticed their steak got a little more expensive as wholesale beef prices increased. Non-food prices remained in deflation, but this slowed in categories such as fashion and furniture as retailers began to unwind heavy promotional activity. Prices were falling faster for electricals as retailers tried to encourage spending before any potential knock-on impact from U.S. tariffs.”
“With retailers now absorbing the additional £5bn in costs from April’s increased Employer National Insurance contributions and National Living Wage, it is no surprise that inflation is rearing its head once again. Later this year, retailers face another £2bn in costs from the new packaging tax, and there are further employment costs on the horizon from the implementation of the Employment Rights Bill. Government must ensure the Employment Rights Bill is fit for purpose, supporting workers’ rights while protecting jobs and investment for growth. If statutory costs continue to rise for retailers, households will have to brace themselves for more difficult times ahead as prices rise faster.”
