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Highlights
- Shoppers are now paying 10.6% more than the previous year, as per the BRC-Nielsen IQ index.
- The overall shop price inflation has surged from 5.1% in August to 5.7% in September, marking a fresh high since records started in 2005.
- From last month's 9.3%, food price inflation jumped to 10.6%.
New data reveals that shoppers currently face the highest food inflation on record, paying 10.6% more than the previous year. According to the latest figures from the British Retail Consortium (BRC)-Nielsen IQ index, the overall shop price inflation has surged from 5.1% in August to 5.7% in September, marking a fresh high since records started in 2005.
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From last month's 9.3%, food price inflation jumped to 10.6%. The major contributor to the rise was the Russia-Ukraine war, which has been lifting the cost of fertiliser, animal feed, vegetable oil etc. Compared to last year, fresh food items' prices are up by a record rate of 12.1%. Going up from 10.5% in August, this is the greatest inflation rate recorded for the category.
Surging from 7.8% last month, ambient food inflation has also hit a record 8.6%, marking the greatest rate hike for the category. Amid the rising transportation costs, non-food inflation has also gone up from 2.9% in August to 3.3%.
According to BRC's CEO Helen Dickinson, retailers are struggling with massive cost burdens owing to the weak pound, soaring energy bills, elevated transportation costs, tightening of the labour market, and the accumulative liability of Government-imposed expenditures.
Amid these issues, UK investors may assess the performance of supermarket stocks.
Tesco plc (LON: TSCO)
Tesco plc holds a marker cap of at £16,103.73 million as of 28 September. The global retailer of groceries and general merchandise EPS (earning per share) stands at 0.19, with a P/E ratio of 11.08. Currently, the company is offering an annual dividend yield of 5.0%. TSCO shares were trading at GBX 216.10 on Wednesday as the market opened at 8:00 AM (GMT+1). Tesco's returns on both YTD and annual basis stand as of 28 September stands at -25.46% and -16.21%, respectively.
J Sainsbury plc (LON: SBRY)
The market cap of the second greatest group of supermarkets across Britain stands at stands at £4,433.58 million as of 28 September. The FTSE 100 company's EPS stands at 0.30, with a P/E ratio of 6.65. Currently, J Sainsbury plc is offering an annual dividend yield of 6.8%. SBRY shares were trading at GBX 186.55, tumbling by 1.35%, on Wednesday as the market opened at 8:00 AM (GMT+1). Sainsbury's returns on both YTD and annual basis have witnessed depreciation and stood at -31.44% and -35.29% respectively.
Marks and Spencer Group plc (LON: MKS)
UK-based Marks and Spencer Group plc’s market cap stands at £2,009.21 million on Wednesday. MKS shares were trading at GBX 100.75, falling by 1.52%, on Wednesday as the market opened at 8:00 AM (GMT+1). The group's returns on both YTD and annual basis stand in the negative territory as of 28 September, at -55.79% and -46.93%, respectively.
