Driven by food costs, shop prices rise at their fastest rate in 10 years
Written by Gavin on 2nd March 2022
Shop prices rose at their fastest rate in over a decade last month, new figures show.
Retail price annual inflation accelerated to 1.8% in February, up from 1.5% in January – the highest rate of inflation since November 2011, according to the BRC-NielsenIQ Shop Price Index.
Rapidly rising food prices, particularly for fresh produce – which has been impacted by poor harvests globally, remained the key driver behind inflated prices.
But increased health, beauty, and furniture prices also contributed to the inflationary increase from January, with non-food inflation rising from 0.9% in January to 1.3% in February, its highest rate since September 2011.
Increased pressure on households
“Price rises will be unwelcome news for households who already face falling disposable income because of the rise in national insurance and energy price caps,” said Helen Dickinson, chief executive of the British Retail Consortium.
“Retailers continue to face cost pressures from higher shipping rates, with crude oil prices having almost doubled over the last year.
“Other pressures include labour shortages, commodity price increases, and rising energy prices.”
While food inflation remained unchanged at 2.7% in February, it remains above the 12 and six-month average price growth rates of 0.7% and 1.6% respectively and is at its highest rate since September 2013.
Ms Dickinson said: “Retailers are going to great lengths to mitigate against these price rises and support their customers, for example many supermarkets have expanded their value ranges for food. Unfortunately, there are limits to the costs that retailers can absorb.”
Inflation hit 5.5% in January, its highest rate since March 1992, as the cost of living in Britain continued to surge, official figures show.
Cost of clothes
The consumer price index (CPI) measure of inflation, up from 5.4% in December, was in line with economists expectations – as clothing, housing, and furniture prices climbed higher, the Office for National Statistics (ONS) has said.
Clothing in particular remained much more expensive than usual for January, when retailers typically discount their prices following Christmas.
“Inflation has increased since the start of the year and the underlying trend in shop prices will be upwards over the next few months,” said Mike Watkins, head of retailer and business insight at NielsenIQ.
“With falling disposable income for most households,” he added, “retailers will need to keep encouraging customers to spend by offering choice and value and, for some, discounts as well as added benefits for loyal shoppers.”
Via IRN/Sky News for GTFM