Shop price inflation accelerated last month, driven by a further rise in the cost of food.
The overall figure in the British Retail Consortium’s (BRC) Shop Price Index rose to 0.8% in December, up from 0.3% in November – marking the second time that prices have risen since May 2019.
Amid weakness on the high street, non-food deflation accelerated to 0.2% last month compared to the decline of 0.1% in November.
However, supply chain issues and higher commodity costs lead to food inflation accelerating to 2.4% in December, up from 1.1% the month before. This is the highest inflation rate since March 2019.
As consumers stocked up for Christmas, fresh food inflation rose significantly last month to 3.0%, up from 1.2% in November. This is the highest inflation rate since April 2013.
Meanwhile, ambient food inflation accelerated to 1.7%, up from 0.9% in November. This is the highest rate of increase since March 2021.
“The trajectory for consumer prices is very clear: they will continue to rise, and at a faster rate,” Helen Dickinson, Chief Executive of the British Retail Consortium, said:
“Retailers can no longer absorb all the cost pressures arising from more expensive transportation, labour shortages, and rising commodity and global food prices. Consumers will already be harder pressed this year, with rising energy bills, the looming hike in national insurance, and more expensive mortgages. Government should relieve some of these costs by looking for long-term solutions for resolvable issues such as labour shortages.”
NAM Implications:
- Merely the first drop in the inflation-ocean!
- Forget the official stats…
- …and think 5-10% shelf-price inflation…
- …Minimum.
- (Meanwhile, see Pound-in-your-pocket inflation for a consumer’s-eye-view)
