Higher prices anticipated in approach to Christmas
Retail bosses have warned once more that consumers will feel the pinch of price rises in the run up to Christmas.
Consumer prices have been projected to rise up to 20 per cent over the next few weeks, according to the Salesforce Shopping Index. This is due to worker and raw material shortages.
Food inflation soared to 0.5 per cent in October, up from 0.1 per cent in September, according to the British Retail Consortium (BRC).
The industry body said shop price annual deflation also eased to 0.4 per cent in October compared to September’s decrease of 0.5 per cent. This is the slowest rate of decline since January 2020, the BRC added.
Helen Dickinson OBE, BRC chief executive, said: “While overall prices remain below their October 2020 levels, this is the third consecutive month of both food and non-food month-on-month rises. October food prices saw the highest rate of year-on-year inflation since November 2020, with fresh food prices rising for the first time in ten months.
“Meanwhile, in non-food, ongoing global shortages of materials and supply issues with logistics and shipping continue to put upward cost pressures on products such as furniture. It is now clear that the increased costs from labour shortages, supply chain issues and rising commodity prices have started filtering through to the consumer.
It comes as the CBI forecast sales would be above seasonal norms in November.
However, stock levels in relation to expected demand hit a record low for the seventh consecutive month in October across the distribution sector as a whole.
Ben Jones, CBI’s principal economist, said: “The UK’s economic recovery has been pretty bumpy lately and the same seems true of the retail sector. Sales performance has jumped around in recent months, while stock shortages continue to bite.
“Disruption to supply chains, combined with staff shortages and uncertain public health conditions mean retailers are finding it difficult to plan for the winter ahead.
“It’s therefore crucial the Government remains agile to support the sector. The Chancellor has the opportunity at his upcoming budget to signal the government’s intent to reform the outdated business rates system, starting with more frequent revaluations and removing any disincentives for investment in energy efficiency and decarbonisation.”
Big names including Ben & Jerry’s maker Unilever have already declared price increases in the face of supply chain pressures.