Shop prices rose during October due to the significant input cost pressures faced by retailers from rising commodity and energy prices, as well as a tight labour market.
According to the latest BRC-Nielsen IQ Shop Price Index for October 2022, shop price annual inflation accelerated to 6.6% in October, up from 5.7% in September. This is above the 3-month average rate of 5.5%. This marks another record for shop price inflation since this index started in 2005.
Non-Food inflation accelerated to 4.1% in October, up from 3.3% in September. This is above the 3-month average rate of 3.4%. Inflation remains rose to a fresh series’ high in this category.
Food inflation accelerated strongly to 11.6% in October, up from 10.6% in September. This is above the 3-month average rate of 9.7%. This is the highest inflation rate in the food category on record.
Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said: “It has been a difficult month for consumers who not only faced an increase in their energy bills, but also a more expensive shopping basket. Even the price of basic items went up, with the price of the humble cuppa rising, as tea bags, milk and sugar all saw significant rises. While some supply chain costs are beginning to fall, this is more than offset by the cost of energy, meaning a difficult time ahead for retailers and households alike.
“With Christmas fast approaching, customers are looking for any sign of respite, but it is increasingly difficult for retailers to shoulder the ongoing supply chain pressures. The Government can support households by reducing the cost burden that prevents retailers from keeping prices down for their customers. Government must freeze business rates to prevent an additional £800m bill landing on the plates of retailers and in turn their customers in 2023.”
Mike Watkins, Head of Retailer and Business Insight, NielsenIQ, said: “External factors are keeping shop price inflation at record highs and the challenging economic conditions are significantly impacting consumer confidence and retail spend. With pressure growing on discretionary spend across both non-food and food retail, delivering good value is the table stake in the battle for shopper loyalty over the next 8 weeks.”