Shop prices rise for first time in five years
Shop prices rose for the first time in over five years in August, according to new figures.
The data from the British Retail Consortium and Nielsen in their monthly shop price index reveals that prices increased by 0.1% in August after a decrease of 0.3% in July.
While non-food deflation continued to ease in the month to 1% from 1.4% in July, food inflation accelerated to 1.9% from July’s rate of 1.6%.
Helen Dickinson, BRC chief executive, said: “Despite significant increases in costs in the supply chain, this month’s figures show that retailers are keeping price increases faced by consumers to a minimum.
“However, current inflationary pressures pale in comparison to potential increases in costs retailers will face in the event the we leave the EU without a deal. If that does happen retailers will not be able to shield consumers from price increases."
Fresh food inflation picked up in August with prices rising by 1.5%. This was up from July’s rate of 1.2%. The BRC and Nielsen attributed the increase to this year’s hot, dry summer combined with uplifts in the prices of oil and agricultural products on global markets earlier in the year.
Meanwhile, ambient food inflation accelerated to 2.5% in August from 2.2% in July.
Mike Watkins, head of retailer and business insight at Nielsen, added: "With the recent hot summer weather, shoppers have been visiting food stores more often and purchasing more food and drink, with promotional offers helping to limit the impact of some cost increases coming through the supply chain. So it’s of no surprise that shop price inflation is a little higher this month.
“The challenges for the high street are different with less opportunity to stimulate demand. However, compared to the recent increase seen in the CPI, there is still limited inflationary pressure coming from retail at the moment."
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