The cost of buying groceries in Zimbabwe increased almost tenfold in 2005, according to the country's independent Consumer Council.
Some Zimbabweans have resorted to scavenging for food
Its report found that the price of a loaf of bread rose by 1,157% throughout the year to 44,000 Zimbabwean dollars (55 US cents; 32p). Milk rose 1,718%.
The runaway prices have caused living standards to plummet, especially since unemployment has risen to 80%.
The Zimbabwean government's own figures put the inflation rate at 502%.
Yet this figure is calculated on a broader selection of goods and services, some items of which have recorded smaller price hikes than essential food products.
Zimbabwe's economy has now been in sharp decline for six years, with severe fuel and food shortages contributing to the sky-high inflation.
While the United Nations says this is because of mismanagement by the government, Mr Mugabe instead puts the blame on sanctions imposed by Western nations following his controversial seizure of white-owned farms.
More recently, the UN and Western nations have attacked the demolition of thousands of homes and market stalls, a move strongly defended by the government as an urban renewal drive.
The Consumer Council's end-of-year report said 2005 had been an "agonising" year for Zimbabwean consumers.
Aid agencies estimate that 70% of Zimbabwe's 12 million population now survive on one meal or less a day, while the UN World Food Programme expects to feed some three million Zimbabweans next month.
The Consumer Council is now urging people to shop around for the best price and engage in "lawful informal trade, small-scale business and other income-generating activities".