Rising beef prices and costlier fresh produce have driven UK food inflation to its highest rate in a year, according to new figures from the British Retail Consortium (BRC).
In its latest report, the BRC said food prices rose by 2.8% in the year to May, up from 2.6% in April, marking the fourth consecutive monthly increase.
Helen Dickinson, chief executive of the BRC, said retailers were facing growing cost pressures, including higher minimum wages and increased employer National Insurance contributions, which were being passed on to consumers.
A key factor behind the latest rise in food inflation is the sharp increase in beef prices. Nick Allen, chief executive of the British Meat Processors Association, said the price of beef had reached “record levels” due to strong consumer demand and falling supply.
“There’s been a consistent rise in the farm price for beef, and it’s now at a record high,” Mr Allen told the BBC. “Supermarket competition previously kept prices in check, but it was only a matter of time before costs reached consumers.”
Mr Allen added that the industry was finding it difficult to meet the growing demand for beef, and suggested government support had focused more on environmental schemes than on food production.
Jilly Greed, a Devon-based arable farmer and beef producer, explained the price surge was being driven by basic economics. “There’s a 5% shortfall in cattle on the land and a 1% rise in consumer demand. That combination has significantly pushed prices up,” she said, noting the impact was being felt across the supply chain.
The BRC noted that red meat lovers “may have noticed their steak got a little more expensive” in recent weeks.
Tomas Maunier, co-founder of the steakhouse chain Fazenda, said beef prices had jumped by around 20% over the past year, with much of the rise occurring in the past six months. “We’ve passed on about 2% of our increased running costs to customers,” he said. “But we can’t pass on the full increase.”
The latest inflation data raises concerns that ongoing pressures in the meat and produce markets could continue to drive up food prices in the coming months.
