Price of fresh food soars record 11% in just ONE month

By Daily Mail Reporter
Last updated at 4:07 PM on 06th August 2008

The price of fresh food has rocketed by a record 11 per cent in just one
month, a survey showed today.

The soaring cost of oil and increased production costs have been blamed
for the double-digit increase in food.

The British Retail Consortium-Nielsen Shop Prices Index (SPI) revealed
that fresh foods were 10.8 per cent dearer in July compared to a year
ago.

The figure rose from 8.4 per cent in June, and has more than trebled
over the past 12 months.

Annual inflation for all food was 9.5 per cent last month, the survey
showed, while ambient foods - including tinned and other longer-lasting
items - showed a 7.4 per cent rise.
fresh fruit

The price of fresh fruit and vegetables has rocketed in recent months

The BRC said the cost of oil, which topped 147 US dollars a barrel in
July but has since dropped back to below $120 this month, had a direct
impact on costs associated with packaging, storage and distribution.

Higher costs for pork, margarine, cooking oils and fats also drove up
in-store prices, the trade body said.

BRC director general Stephen Robertson said: 'Overall food prices are
rising but retailers are keeping increases well below the extra supply
and operating costs they face.

'Falls in the prices of oil and some world food commodities, such as
wheat and soya, provide hope but most retail costs remain sharply up on
a year ago and are still rising.'

Overall inflation recorded by the BRC reached 3.2 per cent, the highest
figure since the survey began in December 2006.

This compares to an official inflation figure of 3.8 per cent recorded
in July, which is also a series record. Annual food inflation was found
to be running at almost 10 per cent within the data.

The BRC survey found there was some downward price pressure on various
goods as retailers reduced prices to attract in hard-pressed shoppers
struggling during the economic downturn.

Clothing and footwear goods registered a reading of minus 2.7per cent in
July, while the electricals sector reported minus 3.3 per cent.

The BRC said: 'Retailers are still discounting in order to drive sales
in tough conditions.

'Consumers often use credit to purchase big-ticket electrical items,
however, with credit turning increasingly scarce and more affluent
consumers are cutting back on spending on credit cards.'

Furniture and floor coverings reported annual inflation of 2.5 per cent
in July, down from 3.3 per cent reported in June.

Retailers in the sector faced rising raw materials costs for goods such
as timber, as well as rising manufacturing and processing costs, the BRC
said.

Mike Watkins from Nielsen said: 'While food inflation increased again in
July, savings will need to be made by shopping differently to help pay
for the other increases in household spend such as energy and fuel.'

http://www.dailymail.co.uk/news/article-1042252/Price-fresh-food-soars-
record-11-just-ONE-month.html