BRC: Inflation leaves shop prices at all-time high
The British Retail Consortium has has found that shop price annual inflation reached 8% in January, higher than the three-month average of 7.5%, leaving shop prices at an all time high.
Food inflation also rose to 13.8% in January, a 0.5% increase from December and higher than the three-month average of 13.2%, now the highest on record.
Non-food inflation increased to 5.1%, in line with the three-month average of 4.7% and a new high in this category.
Fresh food and ambient food also saw an increase in inflation, with increases of 0.7% and 0.3% to 15.7% and 11.3% respectively, both are new records.
Helen Dickinson OBE, chief executive of the British Retail Consortium, said: “Retail prices rose in January as discounting slowed and retailers continued to face high input costs.”
“With global food costs coming down from their 2022 high and the cost of oil falling, we expect to see some inflationary pressures easing. However, as retailers still face ongoing headwinds from rising energy bills and labour shortages, prices are yet to peak and will likely remain high in the near term as a result”, she added.
Mike Watkins, head of retailer and business insight at NielsenIQ, added: “Consumer demand is likely to be weak in Q1 due to the impact of energy price increases and for many, Christmas spending bills starting to arrive. So the increase in food inflation is going to put further pressure on household budgets and it’s unlikely that there will be any improvement in the consumer mind-set around personal finances in the near term. With shoppers having less money to spend on discretionary retail having paid for their essential groceries, there will be little to stimulate demand across the non-food channels.”