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Shoppers are likely to pay more for their Christmas dinner this year as food prices rocketed to their highest levels in more than a year.

The warning came from the British Retail Consortium as its latest monthly shop price index recorded a rise for the first time since May 2019.

Food inflation accelerated to 1.1% in November, up from 0.5% in October, which is the highest rate since November 2020. It is above the 12 and 6-month average price growth rates, which both stand at 0.1%.

Fresh food prices soared this month as suppliers passed on higher costs to supermarkets, with inflation in the category up 1.2%, compared with just 0.3% in October. It is the highest inflation rate for fresh food since August 2019.

Ambient food inflation accelerated to 0.9% in November, up from 0.8% in previous month.

Overall shop prices rose by 0.3%, compared with a fall of 0.4% in October, as the higher cost of food more than offset continued deflation in non-food retail, which slowed to 0.1%, down from 1% a month before. It is the first time the index climbed into inflation since May 2019.

BRC chief executive Helen Dickinson said: “The impact of labour shortages, rising commodity prices and transportation costs have now very clearly taken their hold on consumer prices.”

She warned: “With food prices rising, and particularly fresh food, we may find some of our Christmas shopping a little more expensive this year.

“Food was also affected by a rise in global food costs, where certain staples, such as vegetable oil, have doubled in price in the past two years.”

The BRC expected the rate of inflation to continue to accelerate over the coming months as a result of the ongoing labour shortages in the supply chain and rising transport and commodity costs.

Dickinson added: “Retailers are doing all they can to mitigate the impacts for their customers, government also must play its part and work with industry to find long-term solutions to the labour shortages as this will help to relieve cost pressures and protect the pockets of the British public who are already facing mounting costs from increasing energy prices and the looming rise in national insurance.”

Mike Watkins, head of retailer and business insight at NielsenIQ, said: “The significant increases in energy and travel costs are adding pressure to household budgets and the remaining weeks of the ‘Golden Quarter’ could be an uncertain time for shopper spend.

“NielsenIQ shopper research shows that 4 in 10 households feel that their spending is constrained and whilst inflationary pressures are now coming from both food and non-food, retailers continue to keep hold back increases in shop prices ahead of Christmas.”

Morning update

Supermarket Income REIT has bought a Sainsbury’s supermarket in Staffordshire from a client of CBRE Investment Management for £75.8m.

The store in Cannock opened in 1997 and was extensively refurbished in 2011. The 9.1-acre site comprises a 73,000 sq ft net sales area supermarket, a 12-pump petrol filling station and 490 car parking spaces. The store has a purpose-built online fulfilment centre that operates 12 vans, forming a key part of Sainsbury’s online grocery network across the region.

The asset is being acquired with an unexpired lease term of 15 years.

Ben Green, director of Atrato Capital, the investment adviser to Supermarket Income REIT, said: “This Sainsbury’s in Cannock is an excellent addition to our growing portfolio of high-quality omnichannel stores and was funded using proceeds from the recently oversubscribed equity issue. The property has strong trading fundamentals and forms a key part of Sainsbury’s online fulfilment network.”

The FTSE 100 bounced back this morning despite the ongoing uncertainty caused by the new Covid variant. The index opened 1.1% higher at 7,137.68pts.

Early climbers included McColl’s Retail Group, which rose 6.7% to 12.8p, Marston’s is back up 3.1% to 67p after yesterday’s sell-off, Pets at Home is up 2.8% to 480p, Greencore is 2.7% higher at 128.4p and Diageo is up 2.4% to 3,891.5p.

In the red first thing are Kerry Group, Deliveroo and Reckitt Benckiser, down 2.1% to €107.75, 1.7% to 293.9p and 0.9% to 6,055p respectively.

Yesterday in the City

The FTSE 100 fell back yesterday, giving up recovery gains made on Monday following Friday’s sell-off. Investors were jittery after remarks by the boss of Moderna raising question marks over the effectiveness of the vaccines on the new Covid variant. However, despite being down more than 1% in the early going, London’s blue-chip index clawed back some losses in the afternoon to finish just 0.4% down at 7,079.01pts.

Despite those worries for sectors hit hard by the pandemic, such as food to go, Greencore jumped 1.5% higher to 125p yesterday after it revealed a return to profit in the year to 24 September.

Shares in drinks ingredients supplier Treatt were not as lucky, falling 0.4% to 1,115p even as it bounced back to revenue and profits growth in its latest financial year.

Other fallers included Deliveroo, down 4.5% to 299.1p, Marston’s, down 6.5% to 65p as it reported a 48% drop in sales, and Heineken, which fell 5.4% to €88.40 after it emerged JD Wetherspoon had switched the brewer for rival AB InBev.