Overall shop prices fell in September, but with a slower rate of decline, according to latest NielsenIQ data, showing that the cost pressures are filtering into prices.
The BRC-NielsenIQ Shop Price Index for September has seen annual deflation in shop price easing to 0.5 per cent - the slowest rate of decline since January 2020 - compared to August’s decrease of 0.8 per cent. This is a slower rate of decline than the 12- and 6-month average price decreases of 1.4 per cent and 0.8 per cent, respectively.
Following five months of deflation, food prices rose by 0.1 per cent in September, up from -0.2 per cent in August. This is below the 12-month average price growth rate of 0.2 per cent and above the 6-month average price growth rate of -0.3 per cent.
Ambient food inflation accelerated to 0.8 per cent in September, up from 0.3 per cent in August. However, low prices on seasonal fresh foods helped offset rising prices in ambient food. Fresh food prices fell for the tenth consecutive month, with deflation easing to 0.4 per cent from a decline of 0.6 per cent in August.
Non-food deflation slowed to 1.0 per cent, compared to a fall of 1.2 per cent in August. NielsenIQ said they expect the shop price inflation to return over the next few months
“There are now clear signs the months-long cost pressures from rising transport costs, labour shortages, Brexit red-tape, and commodity costs are starting to filter through to consumer prices,” Helen Dickinson, chief executive of the British Retail Consortium (BRC), commented.
“Food prices rose year-on-year for the first time in six months, and some non-food products, such as DIY & gardening, are seeing the highest rate of inflation since summer 2018. Other product ranges, such as furniture and electricals, have also seen annual prices rise for consecutive months, which is indicative of unresolved shipping issues coupled with high demand.”
Dickinson warned that prices will continue to rise, and urged the government to take measures to minimise the impact on consumers..
“Supply chains have been put to the test recently, with CO2 and HGV shortages. Government needs to find a long-term solution to the HGV driver shortage by expanding the size and scope of the new visa scheme for drivers from abroad so they can fill the gaps while new British drivers are trained,” she said.
“Without this, these additional burdens to what is already a precarious trading environment, will affect the British consumer and the prices they pay for the goods they want and need.”
