The British Retail Consortium (BRCs) has warned that inflationary pressures are likely to intensify over the summer despite a slowdown in food price growth, as rising energy costs and geopolitical disruption continue to weigh on the sector.

According to the latest figures from the retail organisation, shop price inflation increased to 1.2 per cent year-on-year in May, up from 1.0 per cent in April and above the three-month average of 1.1 per cent.

The BRC said the rise was driven largely by higher non-food prices, particularly across furniture and health and beauty categories.

Non-food inflation rose to 0.5 per cent in May, reversing the 0.1 per cent decline recorded in April. The BRC said retailers faced increasing pressure from higher raw material and shipping costs, although consumers were still able to find discounts in some categories, including televisions and audiovisual products ahead of the summer sporting season.

Food inflation eased to 2.7 per cent from 3.1 per cent in April, reaching its lowest level in a year as supermarkets maintained promotional activity following Easter. Fresh food inflation slowed to 3.4 per cent, down from 3.9 per cent, while ambient food inflation fell to 1.6 per cent from 2.1 per cent.

“While retailers work hard to keep prices down for customers, they continue to face significant cost pressures, including higher energy bills and disruption linked to the conflict in Iran,” said Helen Dickinson, chief executive of the BRC. “Businesses cannot absorb these costs indefinitely, which risks pushing prices higher in the months ahead.”

Dickinson urged the government to reduce business costs by cutting non-commodity charges, taxes and levies attached to energy bills, as well as reducing regulatory burdens on retailers.

Earlier this month, the BRC called on the government to take action over rising costs, as its research shows that 80 per cent of consumers are worried the conflict in the Middle East will push up the price of food.

A survey by the retail organisation found that 73 per cent of shoppers are worried about price rises on other goods.

Last week, the government announced it was planning to grant the Competition and Markets Authority stronger powers to tackle price gouging, helping ensure companies are not using supply shocks as cover to unfairly raise prices. It additionally announced a removal of tariffs on over 100 goods to support supermarkets, urging them to pass the savings onto customers.

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