The latest BRC-NielsenIQ Shop Price Index confirms that inflation is accelerating in both the food and non-food retail sectors.
The overall figure rose from 0.8% in December to 1.5% in January, the highest rate of inflation recorded by the index since December 2012.
Official figures last month showed that wider consumer inflation jumped to 5.4% in December, the highest rate for 30 years, driven up by higher energy costs and rising retail prices.
The BRC and NielsenIQ figures are based on price changes of commonly bought items in retail stores. They showed that food inflation increased from 2.4% to 2.7% in January, the highest inflation rate since October 2013.
Fresh Food inflation slowed slightly last month to 2.9%, down from 3.0% in December. However, ambient food inflation accelerated to 2.4%, up from 1.7% the month before.
Figures released by Kantar yesterday showed that grocery prices rose 3.8% over the four weeks to 23 January. It said prices were rising fastest in categories such as savoury snacks, fresh beef, and crisps, while falling in fresh bacon, vitamins, and beer.
Meanwhile, the BRC data found that the non-food sector saw inflation of 0.9% in January compared to a fall of 0.2% in December.
Helen Dickinson, 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.
“Food prices continue to rise, especially domestic produce which have been impacted by poor harvests, labour shortages, and rising global food prices.”
She highlighted that this will directly affect the cost-of-living crisis, saying “it would be impossible to protect consumers from any future rises” in costs.
Dickinson concluded: “As commodity prices, energy prices and transportation costs continue to rise, it is inevitable that retail prices will continue to follow in the future.”
The Bank of England is widely tipped to raise interest rates again this week in a bid to cool inflation.
NAM Implications:
- From a NAM’s POV, the issue is how consumers view ‘real’ on-shelf inflation.
- i.e. inflation that affects their purchasing behaviour and hence demand.
- And street-level inflation is perceived to be running at 5%-10%, with more to come…
- And any action by the Bank of England to curb inflation will be a further deterrent to spending…
- See Pound-in-pocket Inflation
