Shop price inflation increased to 2.1% year on year in October, up from 1.4% in September, according to the BRC-NIQ Shop Price Monitor. The figure is above the three-month average of 1.6%.
Food inflation rose to 2.9% year on year in October, compared with 2.5% in September, and above the three-month average of 2.7%. Non-food inflation also increased, reaching 1.7% year on year.
Fresh and ambient food trends
Fresh food inflation remained unchanged at 2.6% year on year in October, while ambient food inflation increased to 3.2% year on year.
Helen Dickinson, chief executive of the British Retail Consortium (BRC), said: “Shop price inflation rose to its highest level in two and a half years.”
She added: “The dam is starting to break on the huge wave of costs retailers have absorbed over the last two years. Food inflation rose again, driven by ambient groceries, although retailers still delivered plenty of promotions on sweet treats ahead of Halloween.”
Call for Budget measures
Dickinson issued a direct appeal to the chancellor ahead of the Budget: “The message to the chancellor ahead of tomorrow’s Budget could not be clearer: act now or prices will keep on rising. Retailers cannot endlessly swallow higher business rates, employment costs, energy bills, and packaging taxes.”
She warned: “Without a change of course, October’s jump in inflation is only the beginning. Our recipe for the chancellor is simple. Slash employment costs. Cancel the 3.5% business rates increase. Remove shops from the high-value surtax. Otherwise, households will end up paying the price.”
Supply chain pressures and consumer caution
Mike Watkins, head of retailer and business insight at NIQ, said: “With global supply chain pressures building over the last 6 months, higher inflation across retail was to be expected.”
He noted that “price cuts by food retailers since the end of summer has delayed some of the impact and high street retailers, faced with consumers becoming more cautious in the face of higher energy and fuel costs, will now be more reliant on promotions to drive discretionary non-food spend.”
