The rising food prices in Britain have made it hard for major retailers to attract shoppers back to the high street this July. Increasing costs of meat and butter pushed food prices higher, adding to pressure on household budgets. Consequently, shoppers grew more cautious with their spending.
According to the latest British Retail Consortium (BRC) report, food prices climbed by 4% in July compared to a year ago. This increase marked a rise from June’s 3.7% and surpassed the three-month average of 3.5%. Furthermore, the BRC highlighted that while fresh fruit and vegetable inflation stayed steady at 3.2%, cupboard food prices surged by 5.1% year-on-year. This jump was higher than June’s 4.3%.
Official data released earlier showed meat prices rose by 17% in the year to June. Meanwhile, butter, which had been falling in price through 2023 and early 2024, surged by 18.2% over the past year. These sharp increases intensified the burden on consumers already struggling with household finances.
In addition, a separate survey by the Confederation of British Industry (CBI) found retailers faced a tough summer. Many blamed economic uncertainty for keeping shoppers from spending freely. Although July saw slight improvements over June, the overall picture remained challenging.
The CBI’s balance of retailers reporting declining sales improved from -46% in June to -34% in July. However, retailers expected sales to drop at a similar rate in August. Martin Sartorius, a CBI economist, explained that higher labour costs and ongoing economic worries weighed on consumer demand. These factors contributed to falling sales volumes since October 2024.
Moreover, the combination of rising prices and uncertainty encouraged households to save more and spend less. This trend deepened difficulties for both high street and online retailers, according to Sartorius.
Helen Dickinson, BRC’s chief executive, emphasized that rising prices for staples like meat and tea drove food price inflation for the sixth straight month. She noted that global supply shortages partly caused the increases, pushing overall shop price inflation up.
Total shop price inflation, including non-food items, rose to 0.7% in July from 0.4% in June. Despite these challenges, Dickinson pointed out some positive signs. Discounts in fashion and furniture gave consumers a chance to refresh wardrobes and homes.
Lastly, the Office for National Statistics reported that retail sales in Great Britain rose by 0.9% in June. This rise contrasted with the more cautious industry surveys, helped by sunny weather and popular events like Wimbledon and concerts by Oasis and Beyoncé.
In summary, the rising food prices in Britain are impacting consumer habits and retailer performance. Still, some sectors are finding opportunities amid the economic uncertainty.
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