Shop price inflation nearly doubled in January
This is above the 12-month average decrease of 0.6 and six-month average price rise of 0.1%, and marks the highest rate of shop price inflation since December 2012.
The BRC and research firm NielsenIQ measured inflation in retailers in the UK in the first week of January, looking at price changes in 500 commonly bought items.
Researchers found that 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.
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% in December. This is 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, BRC chief executive, 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. Food prices continue to rise, especially domestic produce which have been impacted by poor harvests, labour shortages, and rising global food prices.
“The rise in shop prices is playing into wider UK inflation, which is pushing cost of living to the forefront of the political agenda. Many households will find it difficult to absorb the additional costs, as well as others on the horizon. Retailers are working hard to cut costs, but it would be impossible to protect consumers from any future rises. As commodity prices, energy prices and transportation costs continue to rise, it is inevitable that retail prices will continue to follow in the future.”
Mike Watkins, head of retailer and business insight at NielsenIQ, said: “The surge in energy and travel costs is now impacting disposable incomes and is likely to dent consumer’s willingness to spend. NielsenIQ research this month shows nearly a half of all households are saying that their most important concern at the moment is the rising cost of living. 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.”