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Food inflation has leapt to a new high in January as producers continued to battle cost pressures, according to the latest report by the British Retail Consortium.
The retail body said inflation in the category rose to 13.8% this month, compared with 13.3% in January.
Ambient food prices increased from 11% to 11.3%, while fresh food was at 15.7% up from 15%.
BRC CEO Helen Dickinson said an increase for wholesale and bulk prices, particularly for sugar and alcohol, pushed up ambient inflation, while elevated wholesale fruit and veg prices contributed to the jump in the fresh category.
Overall shop price annual inflation accelerated to 8% in January, up from 7.3% in December, with non-food inflation up from 4.4% to 5.1%.
“With global food costs coming down from their 2022 high and the cost of oil falling, we expect to see some inflationary pressures easing,” Dickinson added.
“However, as retailers still face ongoing headwinds from rising energy bills and labour shortages, prices are yet to peak and will likely remain high in the near term as a result.”
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 there will be any improvement in the consumer mindset 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.”
Morning update
Greencore has appointed former Premier Foods CFO Alastair Murray as non-executive director, with effect from today.
He will also chair the group’s audit and risk committee upon appointment.
Greencore said Murray brought extensive food industry and financial experience, having held the role of chief financial officer at Premier Foods until September 2019.
He also has financial experience across a number of listed companies, including Dairy Crest and The Body Shop International, as well as a background in corporate strategy, restructuring and M&A.
Chairman Leslie Van de Walle said: “We are delighted to welcome Alastair to the board. His addition brings significant and valuable experience from customer-focused businesses including Dairy Crest and Premier Foods.
“This, combined with his strong financial experience, makes him an excellent addition to the board.”
Wholesaler Kitwave has appointed Lucie Milburn as divisional operations director of its frozen and chilled division.
She brings more than 17 years of experience within supply chain operations and finance at Diageo, having held director-level positions in both operations and finance.
Milburn will report directly to chief operating officer Ben Maxted and work closely with senior management, including the commercial and finance teams, to “drive divisional profitability and efficiency”.
Kitwave’s frozen and chilled division is made up of Eden Farm and Central Supplies, which together cover nine strategic UK depot locations and employ more than 550 staff.
COO Ben Maxted said: “We are delighted to welcome Lucie. Her extensive experience within supply chain operations, procurement and finance will add considerable value to the frozen and chilled division as we continue to drive organic growth.
“As the group pursues further acquisitions, Lucie’s role will also be pivotal in the successful integration of new businesses and the delivery of operational efficiencies. The whole team looks forward to working with her.”
The FTSE 100 is back up 0.3% to 7,792.80pts this morning.
Early fmcg risers include Ocado, up 3.3% to 667.4p, THG, up another 3.2% to 551p, and Kerry Group, up 2.6% to €87.
McBride is down 2.4% to 24p, Hilton Food Group dropped 1.4% to 653p and Haleon is down 1.3% to 320.1p.
Yesterday in the City
The FTSE 100 closed down 0.1% to 7,774.35pts yesterday following gloomy predictions for the UK economy by the IMF.
Shares in Pets at Home soared 7.1% to 354.8p as the retailer defied the gloom to post strong sales growth in Q3 and upgraded its profits guidance for the year.
Irn-Bru maker AG Barr also increased 4.2% to 549p thanks to a profits upgrade as sales continue to grow.
Other big jumpers included Naked Wines, up 6% to 134p, THG, up 6.3% to 57.9p as activist fund Kelso Group invests, and Science in Sport, up 5.9% to 14.3p.
Fallers included Ocado, HelloFresh and McBride, down 4.8% to 650p, 1.7% to €22.21 and 2.6% to 23.53p respectively.
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