Shop price inflation rose to another record high as retail prices across the board continued to react to the impact of soaring energy bills, higher running costs and tougher trading conditions brought about by the war in Ukraine.
According to the latest BRC-NielsenIQ Shop Price Index for February 2023, Shop Price annual inflation accelerated to 8.4% in February, up from 8.0% in January. This is above the 3-month average rate of 7.8%. This brings shop price growth to a fresh high.
Non-Food inflation accelerated to 5.3% in February, up from 5.1% in January. This is above the 3-month average rate of 4.9%. Inflation rose to a fresh high in this category.
Food inflation accelerated to 14.5% in February, up from 13.8% in January. This is above the 3-month average rate of 13.8% and is the highest inflation rate in the food category on record.
Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said: “For non-food products, these factors particularly impacted gardening tools and pet food. Meanwhile, fresh food prices, especially vegetables, were also affected by a weaker pound, making produce imports from Europe more expensive. While we expect to see the annual inflation rate reduce in the second half of this year, retail prices will remain high over the coming months. Government must avoid any additional costs on business as this will jeopardise retailers’ ability to best support their customers and keep prices low throughout this cost-of-living crisis.”
Mike Watkins, Head of Retailer and Business Insight, NielsenIQ, said: “With more than half (56%) of UK consumers feeling they are in a worse financial position compared to a year ago and inflation still stubbornly high, many households are trimming back on non-essential spending. And as volume sales are down on last year, some retailers are having to work even harder to encourage customer spend, including additional price cuts or promotional activity. This likely to continue until consumer confidence starts to improve.”