Shop Price Index
Inflation continues to rise
Helen Dickinson OBE, Chief Executive, British Retail Consortium:
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. There is little sign of change, with the Bank of England predicting price rises to continue until at least the Spring.
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. 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. 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.
Mike Watkins, Head of Retailer and Business Insight, NielsenIQ:
“Inflation has increased since the start of the year and 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 for loyal shoppers”