Food prices rose at their fastest rate since 2008 in August as the war in Ukraine raised costs for farmers.
Shop price annual inflation surged to 5.1%, up from 4.4% in July, marking a new record since the British Retail Consortium (BRC) and NielsenIQ index started in 2005.
Fresh food prices were 10.5% higher than last August, up from the 8% annual increase recorded in July, with products such as milk and margarine seeing the biggest rises.
The overall figure was driven by food inflation accelerating to 9.3%, up from 7% last month – the highest rate since August 2008 – as the war in Ukraine and consequent rise in the price of animal feed, fertiliser, wheat and vegetable oils placed mounting pressure on prices.
The rise in shop prices adds to pressure on households already struggling to cope with the prospect of much higher household energy bills this autumn and winter as well as high petrol prices.
BRC chief executive Helen Dickinson said the outlook was “bleak for both consumers and retailers”, but that businesses would support people through “discounts to vulnerable groups, expanding value ranges, fixing prices of essentials, and raising staff pay”.
She added: “However, as retailers also grapple with growing cost pressures, there is only so much they can shoulder.
“The new prime minister will have an opportunity to relieve some of the cost burden bearing down on retailers, like the upcoming increase in business rates, in order to help retailers do more to help their customers.”
The rise in food prices is one of the key drivers of inflation, which hit 10.1% in the 12 months to July, up from 9.4% in June, according to the Office for National Statistics (ONS).
High inflation is a key concern for UK households struggling to cope as the energy bills, food prices and cost of filling a car are all rising at alarming rates.
Ofgem recently announced the energy price cap will increase to £3,549 per year for an average household from October 1.
Rocio Concha, Which? director of policy and advocacy, said: “These surging food prices will be concerning for households already grappling with a cost of living crisis in other areas. Even before the latest increases, Which? found the cost of hundreds of popular grocery items had soared by more than 20% in two years. People are responding in a range of ways, including in the most desperate cases having to miss meals, or resorting to food banks.
“Budget ranges are becoming increasingly vital amid the worsening cost of living crisis, but our investigations have suggested that own-brand budget labels have become less available just as consumers need them most.”
The Bank of England has warned that escalating inflation is likely to tip the UK into recession later this year.
Mike Watkins, head of retailer and business insight at NielsenIQ, said: "Inflation continues to accelerate and shoppers are already cautious about how much they spend on groceries, with a fall in volume sales at supermarkets in recent months.
"We can expect this level of food inflation to be with us for at least another six months but hopefully some of the input cost pressures in the supply chain will eventually start to ease.
"However, with further falls in disposable incomes coming this autumn as energy costs rocket again, retail spend will come under pressure in the all-important final quarter of the year."
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