Economy

Shop price inflation surges to 1.5%

Food inflation accelerated to 2.7% in January, up from 2.4% in December. This is the highest inflation rate since October 2013.

Shop Price annual inflation accelerated to 1.5% in January, up from 0.8% in December, according to latest research from the British Retail Consortium (BRC).

This is taken from the period covering 1 – 7 January 2022 and reveals it is above the 12-month average decrease of 0.6 and six-month average price rise of 0.1%.

According to the BRC, this marks the “highest” rate of inflation since December 2012.

Non-Food inflation accelerated to 0.9% in January compared to a fall of 0.2% in December. This is a faster rate of growth than the 12- and six-month average price changes of -1.3% and -0.4%, respectively.

The consortium also said food inflation accelerated to 2.7% in January, up from 2.4% in December. This is above the 12- and six-month average price growth rates of 0.5% and 1.1%, respectively. This is the highest inflation rate since October 2013.

Fresh Food inflation slowed slightly in January to 2.9%, down from 3.0% in December, however. This remains above the 12- and six-month average price growth rates of 0.1% and 1.1%, respectively.

Ambient Food inflation accelerated to 2.4% in January, up from 1.7% in December. This is above the 12- and six-month average price increases of 1.1% and 1.2%, respectively. This is the highest rate of increase since November 2020.

Helen Dickinson OBE, chief executive of the BRC, said:“January saw shop price inflation nearly double, driven by a sharp rise in non-food inflation. In particular, furniture and flooring saw exceptionally high demand leading to increased prices as the rising oil costs made shipping more expensive.”

Mike Watkins, head of retailer and business insight, NielsenIQ, added: “The surge in energy and travel costs is now impacting disposable incomes and is likely to dent consumer’s willingness to spend.

“This will mean stores will need to encourage cash-strapped customers to keep shopping and despite the increase in shop prices, retailers are responding by keeping price increases as low possible for as long as possible.”

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