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Shop prices rise at fastest pace in over a decade

// Shop price rises reach 11-year high, with rising costs exacerbated by fallout from Russia’s invasion of Ukraine
// The BRC said shop prices rose by 2.1% in March for the fastest annual increase since September 2011

Retailers in the UK have increased their prices by the most in almost 11 years this month, according to a survey published that tallies with forecasts showing the country’s inflation rate is set to accelerate further.

The latest British Retail Consortium (BRC)-Nielsen IQ Shop Price Index, which measures changes in the price of 500 of the most commonly bought items on a monthly basis, said shop prices rose by 2.1% in March for the fastest annual increase since September 2011, gathering speed from February’s 1.8% increase.

Analysts have warned that the next few months will be a difficult time for consumer, but the full impact is yet to be seen.

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Helen Dickinson, the BRC’s chief executive, said rising costs were starting to be exacerbated by fallout from Russia’s invasion of Ukraine which would become more severe.

Britain’s consumer prices inflation rate reached a 30-year high of 5.6% in last month and is set to climb above 8% soon with domestic power tariffs due to jump by more than half in April, leaving households facing the biggest hit to their living standards this year since at least the 1950s.

Non-food inflation was to 1.5% in March – up from 1.3% in February – but food prices rose 3.3% from 2.7% last month.

Cost pressures throughout the supply chain, including rising wages, commodity prices, input costs, energy and transport have forced prices to continue their upward trajectory.

While the rise in oil prices has not only impacted domestic energy costs, but also the cost of transporting goods.

Dickinson added: “Our shop price index has been rising more modestly than other inflation measures as retailers were able to limit price rises on many essential goods.

“By keeping the prices of key items down and expanding value ranges, retailers are trying to support customers most affected by the cost-of-living squeeze, many of whom will face higher energy prices and National Insurance Contributions from 1 April.”

“With overall inflation likely to rise even higher, according to the Bank of England, consumers will not have an easy ride this year. The war in Ukraine, and volatility in commodity markets are likely to further dampen consumer confidence in the coming months.”

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