Shoppers under pressure as soaring commodity prices push up prices

Shop prices grew at their fastest rate for eight months in October as retailers passed on some of the soaring costs of basic commodities such as wheat and cotton.

Markets

Other markets

Market Data Notice

More market charts

by Deborah Hyde on Nov 03, 2010 at 00:01

Shoppers under pressure as soaring commodity prices push up prices

Shop prices grew at their fastest rate for eight months in October as rising commodity prices continued to take their toll.

Overall shop price inflation increased to 2.2% as food prices grew 4.4% in the year to October, up from 4% in September, and non-food prices rose 1.1%, up from the 0.7% in the 12 months to September.

However, Stephen Robertson, director general of the British Retail Consortium, claimed retailers were bearing the brunt of higher costs. He said underlying non-food prices had actually fallen if you excluded the impact of the VAT increase at the start of the year.

'Shop prices are rising but retailers are shielding customers from the full impact of the increasing commodity costs that are causing that inflation,' he said.

For example, Robertson said the increases borne by shoppers were far less than the 47% increase in wheat prices and the 90% increase in cotton prices. He said even meat costs are rising as the higher cereal prices have pushed up the cost of animal feed.

Robertson said weak consumer confidence and the sluggish housing market meant retailers were competing even more fiercely for those customers with a bit of extra cash to spend.

With VAT set to rise again, this time to 20%, in January and wages still growing below inflation it looks like household budgets are going to remain under pressure for some time to come.

Email a friend

Email me when someone comments on this article Print

3 comments so far. Why not have your say?

So much for Quantitative easing. One might as well call it the ultimate stealth tax.

report this

"'Shop prices are rising but retailers are shielding customers from the full impact of the increasing commodity costs that are causing that inflation,'"-- pur BULLSHINE, animal fertiliser

A lot of prices ar up by over 50% in the last 6 months, never mind the previous 12 months, mostly due to the brown skidmark's QE.

This talk of .7-2% is dissembling, tht much in a month, and even then a huge understatement, 50-75% is a truer statement over the last 6 months.

Price increases are being passed on, in spades and a bit extra for good measure whilst they are at it, and here we are only talking about the basics of basic food. Luxury items also well, well up.

The monthly figures given are hugely misleading, and not the whole truth. Try also using 2 x , evn 3 x multiplier for the true figures, as any food shopper will twll you.

report this

Daye Tucker

Nov 04, 2010 at 13:28

There should be no price increases for those few in society who still have basic cooking skills. The cost of primary products such as meat has gone down. Most cereal farmers were locked into a contract which doesn't allow them to benefit from the hiked prices caused by global commodity speculators.

The present rise in retail prices reflects opportunistic retail speculation on the one hand and the increased costs in the food chain from the processors onwards to the supermarket shelves.

The more the primary product is processed, altered and shunted around the countryside, the higher the cost of the end product on supermarket shelves. This is the beginning of an opportunity to improve our nation's health through back to basics cooking skills which will save money for households. It's a win win for those prepared to stop wasting wasting money on nutritionally deficient ready meals that leave you feeling hungry and unhappy.

report this

Please sign in here or register here to comment. It is free to register and only takes a minute or two.