Fresh food prices soar as Christmas grocery spending hits new high

4 January 2023, 08:03 | Updated: 4 January 2023, 09:28

Fresh food inflation has hit record levels
Fresh food inflation has hit record levels. Picture: Getty/Alamy

By Kit Heren

Fresh food prices leapt up by 15% in December compared to a year before, reaching the highest levels since records began in 2005.

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The British Retail Consortium said that inflation on all food prices reached 13.3% in December, up from 12.4% in November.

It comes amid warnings that inflation shows "no immediate sign of waning", and Office for National Statistics researching suggesting families are struggling to afford healthy food.

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."

Food prices have been rising for months
Food prices have been rising for months. Picture: Getty

Fresh food inflation leapt to 15% for the month from 14.3% in November, while the price of ambient food, such as pasta and tinned food, increased 11% in December against the same month a year earlier.

However, non-food shops, such as fashion or homeware retailers, saw inflation slow to 4.4% in December from 4.8% a month earlier due to price cuts.

Read more: 'No peak in sight' for food price rises with inflation spiking to record of nearly 15 per cent

Read more: British economy shrank more than previously thought this year, experts say - as recession looms

Ms 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."

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Mike Watkins, head of retailer and business insight at NielsenIQ, which helped carry out the research, said that after the festive period, people were unlikely to be opening the purse-strings much more in the near future.

"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," he said.

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"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."

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