London: The rising cost of chocolate, butter, and eggs has pushed UK food price inflation to its highest level in 18 months, according to the latest survey by the British Retail Consortium (BRC). Food inflation reached 4.2% in the year to August, up from 4% in July, marking the fastest rise since February last year.
Key factors driving food price inflation
The BRC’s shop price monitor highlighted that staples like butter and eggs have experienced “significant increases” due to high demand, tighter supply, and increased labour costs. Chocolate prices, meanwhile, have surged as global cocoa prices remain elevated, affected by poor harvests linked to climate change and crop diseases.
Helen Dickinson, chief executive of the BRC, noted that despite the increase in food costs, parents may find some relief with lower prices for clothing, books, stationery, and computing ahead of the new academic year.
Mike Watkins, head of retailer and business insight at NIQ, which compiles the BRC’s price monitor, explained that the inflation uptick reflects a combination of global supply costs, seasonal food inflation driven by weather conditions, and rising operational costs. “As shoppers return from their summer holidays, many may need to reassess household budgets in response to rising household bills,” he added.
Impact on businesses
Local businesses are feeling the pinch. Kate Rumsey, owner of Rumsey’s Chocolaterie in Thame, Oxfordshire, said chocolate inflation has been consistently high over the past two years. The shop’s cost of chocolate has trebled from around £4,000 per tonne in 2023 to £13,000 per tonne.
Higher staff costs and rising prices for other ingredients, including eggs and butter, have forced her to increase product prices by 10-20%. In some cases, she has removed certain items from the menu due to production costs becoming unsustainable.
Broader inflation trends
Food inflation is contributing to overall inflation in the UK. Official ONS figures for July show the Consumer Price Index (CPI) at 3.8%, up from 3.6% in June. The long-term picture is more pronounced: over the past five years to July, food prices have increased by approximately 37%, compared with 4.4% in the previous five-year period.
Analysts warn that consumers may need to adjust household budgets as the cost of staples continues to rise, and businesses will likely continue passing some of the higher costs onto customers.
Conclusion
Rising prices of essential ingredients such as chocolate, butter, and eggs are pushing food inflation to record levels, affecting both households and small businesses in the UK. While certain sectors like stationery and clothing may offer minor relief, the trend signals ongoing pressure on household budgets