UK Shop Price Inflation Hits Record High with Food Prices Jumping 10.6%

Inflation continues to overwhelm the British economy, the British Retail Consortium index showed on Wednesday. The rise in prices charged by shops and supermarkets in the UK accelerated again in the 12 months to September, hitting its highest since records began in 2005. Prices rose by 5.7% y/y, up from 5.1% in August. The jump was fueled by an unprecedented 10.6% jump in food prices. BRC said the war in Ukraine inflated the costs of animal feed, fertilizer and vegetable oil specifically.

The poll is co-produced by market research firm NielsenIQ who said 76% of consumers expected to be moderately or severely affected by the cost-of-living crisis over the next three months, up from 57% in the summer.

Helen Dickinson OBE, Chief Executive, British Retail Consortium:

With costs mounting across the board, September saw shop price inflation hit yet another high. The war in Ukraine continued to drive up the price of animal feed, fertiliser and vegetable oil, causing fresh food inflation to rise significantly over the past few months, particularly for products such as margarine. While the summer drought diminished some harvests, other produce benefitted from the prolonged sunshine, helping to bring down prices for fruits such as strawberries, blueberries, and tomatoes. Non-food inflation also rose, largely driven by DIY, gardening and hardware products which, as heavier items, have been harder hit by rising transport costs.

Retailers are battling huge cost pressures from the weak pound, rising energy bills and global commodity prices, high transport costs, a tight labour market and the cumulative burden of government-imposed costs. And, with business rates set to jump by 10% next April, squeezed retailers face an additional £800m in unaffordable tax rises. Government must urgently freeze the business rates multiplier to give retailers more scope to do more to help households

Mike Watkins, Head of Retailer and Business Insight, NielsenIQ:

With food and household energy prices continuing to rise, it’s no surprise that NielsenIQ data shows that 76% of consumers are saying they expect to be moderately or severely affected by the cost-of-living crisis over the next 3 months, up from 57% in the summer. So households will be looking for savings to help manage their personal finances this autumn and we expect shoppers to become more cautious about discretionary spend, adding to pressure in the retail sector

The BRC-Nielsen Shop Price Index (SPI) is a monthly measure of UK shop price inflation.

The SPI measures changes in the price of 500 of the most commonly bought items. The SPI demonstrates the extent to which retailers contribute to inflation through the pricing of commonly bought goods. The SPI is administered by Nielsen, who collate the data on behalf of the BRC. The BRC provide analysis and wider commentary on retail-specific and economy-wide inflation.

Source: BRC

From The TradersCommunity News Desk