Shoppers had to pay more for food in December but it could have been worse without supermarket price wars.

According to the BRC-Nielsen Shop Price Index published today, (12) overall shop price inflation increased to 2.1% in December (up from two per cent in November) but food inflation remained higher at four per cent. Non-food inflation increased to 1.1% from 0.9% in November.

Commodity prices are soaring with meat, dairy, cereals, oils and sugar all costing more in each of the past six months. Bad weather has hit harvests, while major producers such as Russia and the Ukraine have imposed export restrictions. Severe flooding in Australia is expected to disrupt sugar production.

Stephen Robertson, British Retail Consortium director general said: "Retailers are protecting British consumers from the full force of global commodity cost increases, with unprecedented levels of discounting taking the sting out of grocery shopping.

"A string of costs are higher than a year ago. Extreme weather and poor harvests have driven coffee up 52 per cent, wheat 45 per cent and soya beans 38 per cent yet the shop price of food is up only four per cent and that figure is no higher than the previous month."

He warned that next month's figures would show the initial impact of the Vat rise from 17.5 per cent to 20 per cent, although some retailers are absorbing the increase for a few weeks.

"Retailers know that customers are worried about their jobs and personal finances. The competitive retail environment will mean stores go on doing all they can to limit price rises."