A sharp rise in the price of wheat and corn have led to the largest increase in food prices for more than a year last month, the British Retail Consortium (BRC) has reported.

Wheat prices have jumped as a result of poor harvests in several countries, including Russia, which banned its export. And the BRC predict more increases are on the way due to the January increase in VAT from 17.5 to 20%.

Vegetable oil and margarine showed double-digit price hikes, while fruit showed its biggest price increases since April 2009.

This will cost a family spending £100 a week on food an extra £230 to their annual bill.

Stephen Robertson, British Retail Consortium Director General, said:

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

“Wheat is up 47 per cent compared with a year ago, affecting the price of staples such as bread – and some meat products, as feed costs work their way up the supply chain.

Mike Watkins, Senior Manager, Retailer Services, Nielsen comments:

“We are seeing the impact of the cost price increases that have been filtering though for a number on months, reflected in increased shop prices during October. So it is of no surprise that both non-food and food retailers have reacted by maintaining or increasing the level and depth of promotions to help drive headline sales.

“And, with volume growths in food retailing slowing in recent weeks, shoppers can probably look forward to even more promotions and offers this Christmas.”

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