Retail prices rise at fastest rate in over a decade

Shop price inflation continued to rise in February, industry data showed on Wednesday, to hit the highest rate for more than a decade.
According to the latest BRC-NielsenIQ Shop Price Index, overall shop price inflation rose 1.8% year-on-year in February, or by 0.5% month-on-month. Annual shop price inflation was 1.5% in January.

The British Retail Consortium said February’s figure was the highest rate of inflation since November 2011.

Annual food inflation was unchanged at 2.7%, the highest rate since September 2013, while non-food inflation rose to 1.3% from 0.9% in January.

Helen Dickinson, chief executive of the BRC, said: “Retail prices rose in February at their fastest rate in over a decade. Food inflation remained the key driver behind higher prices, particularly for fresh food, which has been impacted by poor harvests both in the UK and globally.

“Meanwhile, the increase from last month is a result of rising prices for non-food products, particularly health, beauty and furniture.

“Retailers continue to face cost pressures from higher shipping rates, with crude oil prices having almost doubled over the last year. Other pressures including labour shortages, commodity price increases and rising energy prices.”

Mike Watkins, head of retailer and business insight at NielsenIQ, said: “The underlying trend in shop prices will be upwards over the next few months. With falling disposable income for most households, retailers will need to keep encouraging customers to spend by offering choice and value and, for some, discounts as well as added benefits from loyal shoppers.”

The Shop Price Index is based on a basket of 500 essential goods split evenly between food and non-food items.

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