UK food price inflation hit a new high of 12.4% in November as the price of basics such as eggs, dairy products and coffee shot up.
Fresh foods led the increase in prices – with inflation rising to 14.3% from 13.3% in October – with rises expected to continue into next year according to the latest data from the British Retail Consortium trade body, which represents most big retailers, and the market research firm NielsenIQ.
Overall shop price inflation rose to 7.4% in November from 6.6% in the previous month, a level not seen since at least 2005, as items such as sports equipment also jumped in price.
The rise in the cost of essentials is likely to hit poorer households hardest, many of which are already struggling with higher energy bills, as they have fewer options to make cut backs and savings.
Those on higher incomes are able to offset inflation, to some extent, by reining in spending on non-essentials such as meals out and holidays and switching to cheaper products, by shopping at the discounters such as Aldi and Lidl or buying the big supermarkets’ own-label goods.
Retail bosses said the cost of Christmas would be higher this year despite a wave of discounts aimed at encouraging an uptick in spending during the final month of the year when most businesses make the majority of profits.
Helen Dickinson, chief executive of the British Retail Consortium, said: “Winter looks increasingly bleak as pressures on prices continue unabated. Food prices have continued to soar, especially for meat, eggs and dairy, which have been hit by rocketing energy costs, and rising costs of animal feed and transport.
“Coffee prices also shot up on last month as high input costs filtered through to price tags. Christmas gifting is also set to become more expensive than in previous years, with sports and recreation equipment seeing particularly high increases.”
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Dickinson said cost pressures for retailers may ease next year, reducing pressure on prices for shoppers, but she said: “Christmas cheer will be dampened this year as households cut back on seasonal spending in order to prioritise the essentials.”