New report: Higher prices are likely in run up to Christmas

Higher prices are likely in the run up to Christmas, according to a new report from the British Retail Consortium (BRC).

Key points from the BRC-NielsenIQ Shop Price Index for October 2021 include:

• Shop Price annual deflation eased to 0.4% in October compared to September’s decrease of 0.5%. This is a slower rate of decline than the 12- and 6-month average price decreases of 1.3% and 0.7%, respectively. This is the slowest rate of decline since January 2020.
• Non-Food deflation was steady at 1.0% in October. This is a slower rate of decline than the 12- and 6-month average price declines of 2.3% and 1.1%, respectively.
• Food inflation accelerated to 0.5% in October, up from 0.1% in September. This is above the 12- and 6-month average price growth rates of 0.1% and -0.1%, respectively. This is the highest inflation rate since November 2020.
• Following ten months of deflation, Fresh Food prices rose by 0.3% in October compared to a fall of -0.4% in September. This is above the 12- and 6-month average price growth rates of -0.7% and -0.6%, respectively.
• Ambient Food inflation was steady at 0.8% in October. This is below the 12- month average price increase of 1.2% and above the 6-month average price increase of 0.6%.

 

Helen Dickinson OBE, Chief Executive, British Retail Consortium, said: “While overall prices remain below their October 2020 levels, this is the third consecutive month of both food and non-food month-on-month rises. October food prices saw the highest rate of year-on-year inflation since November 2020, with fresh food prices rising for the first time in ten months. Meanwhile, in non-food, ongoing global shortages of materials and supply issues with logistics and shipping continue to put upward cost pressures on products such as furniture. It is now clear that the increased costs from labour shortages, supply chain issues and rising commodity prices have started filtering through to the consumer.

“Tight margins mean retailers may not be able to absorb all of these new costs, so prices will continue to rise. A BRC survey showed three in five retailers expect prices to increase in the run up to Christmas, and the ongoing labour shortages are making the situation worse. Retailers continue to do all they can ensure value for money for customers and are looking to work with Government to find a long-term solution to these shortages, otherwise it is the British consumer, who already face higher energy bills this winter, who will suffer the consequences.”

Read the full report here