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Shop prices soar as rising costs bite

Shop price inflation spiked in March to reach levels not seen since 2011, industry research showed on Wednesday.
According to the latest BRC-NielsenIQ Shop Price Index, annual inflation was 2.1% in March, up from 1.8% in February.

The figure was well above both the 12- and 6-month averages, of 0.1% and 1.1% respectively, and is the highest rate of shop price inflation since September 2011.

Within that, annual food inflation accelerated to 3.3% from 2.7% in February, the highest rate since March 2013, while non-food inflation was 1.5% against 1.3% a month earlier. It is the highest rate of non-food inflation since February 2011.

Consumers are currently enduring a growing cost of living crisis. Inflation stands at 6.2%, the highest in three decades, and the Office for Budget Responsibility expects it to continue rising before peaking at 8.7% in the winter. Data published by retail consultancy Kantar on Tuesday, meanwhile, showed that grocery price inflation reached 5.2% in March – the highest since April 2012.

Helen Dickinson, chief executive of the British Retail Consortium, said: “Consumers were hit once again by rising prices, with March seeing the fifth consecutive month of inflation. There have been mounting cost pressures throughout the supply chain for some time, including rising wages, input costs, global commodity prices, energy and transport.

“Our Shop Price Index has been rising more modestly than other inflation measures, as retailers were able to limit price rises on many essential goods.

“With overall inflation likely to rise even higher, consumers will not have an easy ride this year. The war in Ukraine and volatility in commodity markets is likely to further dampen consumer confidence in the coming months.”

Mike Watkins, head of retailer and business insight at NielsenIQ, said: “With cost of living increases accelerating, the next few months will be a difficult time for consumers.

“Rising food prices will start to impact what’s put in the shopping basket, so supermarkets will need to adapt ranges…while high street retailers will be competing for discretionary spend that’s coming under increasing pressure.”

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