New figures warns that food inflation has hit a record high and in December food prices shot up to 13.3% compared to 12.4% in November which was a “challenging Christmas” for many households.
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.”
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.”
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 mind-set 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.”