Ideal Business Consultants

Shop price inflation was pushed higher in August by a jump in food prices, official figures show.

The British Retail Consortium (BRC) shop price index found that overall inflation rose from 1.5% in July to 1.7% in August, in comparison to the same months last year.

This was mainly due to food inflation, which picked up to 3.8%, which is the highest it’s been since July 2009, whereas non-food price inflation slowed from 1.0% to just 0.5%.

BRC director-general, Stephen Robertson said:

“The situation was nowhere near the return of the double-digit food inflation of two years ago, despite its recent rise in cost, wheat is currently over a third cheaper than its peak in 2008, while oil prices are virtually half of what they were back then.”

However, Robertson tempered the good news, saying that the rise only came in comparison to a “very poor” August 2009, and saying that last month’s sales were often deal-driven.

He feels that the situation will worse as job cuts and tax rises is deterring people from making major spending commitments.

Robertson added:

“With the Government about to detail its cuts and a VAT rise in prospect, retailers will be hoping consumer confidence doesn’t slip over the next few months.”

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