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The Markets
by Proactive
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The Markets
by Proactive
Proactive UK has moved.
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Retail

UK shop price inflation returns as food prices rise higher

UK shop prices returned to inflation last month, as food inflation increased further due to higher meat and vegetable prices.

Figures compiled by the retail industry showed total shop price inflation was 0.4% higher in June than in the same month a year ago, after declining in every month so far this year.

Food inflation increased to 3.7%, according to the British Retail Consortium and NielsenIQ, up from growth of 2.8% in May, 2.6% in April and 2.4% in March.

Fresh food inflation increased to 3.2%, up from 2.4% in May.

"Food inflation showed little sign of slowing down," said BRC chief executive Helen Dickinson, "particularly in fresh produce, where prices of meat have been impacted by high wholesale prices and more expensive labour costs. Meanwhile, fruit and vegetable prices increased due to the hot, dry weather reducing harvest yields."

Ambient food inflation also increased, though, rising to 4.3% from 3.3%.

Non-food inflation, which has been negative so far this year, saw a smaller decline of 1.2% year-on-year in June, easing from the 1.5% in May and below the deflation of 1.4% and 1.9% in April and March.

Dickinson called on the government to "find ways to alleviate the cost pressures bearing down on retailers", suggesting the upcoming business rates reform "offers such an opportunity, and the government must ensure no shop pays more as a result of the changes".

Large retailers made massive profits in the past year, with supermarket chains Tesco and Sainsbury's making profits of around £3.1 billion and £1 billion respectively. Clothing retailer Next also made its first £1 billion profit last year.

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