Shop price inflation eases in relief for cash-strapped Brits
Shop price inflation slowed in February, as retailers introduced a raft of promotions to ease the cash burden on struggling shoppers.
The price of goods in UK shops grew at a rate of 1.1 per cent in February year on year, down from the 1.5 per cent rate of inflation seen in January, according to figures released by the British Retail Consortium (BRC).
While this will bring welcome respite for the ever-growing price of Brits’ weekly shops, retailers warn they are battling with high employment costs, driven by tax rises and Labour’s employment reforms.
Helen Dickinson, chief executive of the BRC, said: “Households got some welcome relief in February as shop price inflation eased. Fierce competition between retailers kept price rises in check, with promotions across health, beauty and fashion.”
Shop prices stayed flat from January, with a month-on-month inflation rate of 0 in February, though prices had increased marginally by 0.4 per cent from December to January.
While food prices continue to inflate, the rate fell from 3.9 per cent year on year in January to 3.5 per cent last month.
The cost of fresh food is rising faster though inflation in this category slowed too, down from a year-on-year inflation rate of 4.4 per cent in January to 4.3 per cent in February.
The inflation rate of ambient food – meaning products which are kept at room temperature on shelves or in pantries – fell the fastest, down to 2.3 per cent in February from 3.1 per cent the month before.
Last month, the chief financial officers at the UK’s leading retailers warned they may be forced to cut working hours or even slash jobs as they adapt to the Labour government’s employment rights reforms.
Falling global food costs also fed through, pushing food inflation down, with ambient food inflation dropping to its lowest level in four years.
Dickinson said: “Retail operates on thin margins yet has faced relentless tax rises in recent years.
“The Employment Rights Act could add further complexity if secondary legislation is implemented without an eye firmly on the potential consequences for the cost of doing business and hence the cost of living.”
Mike Watkins, head of retailer and business insight at consumer intelligence firm NIQ, said: “Whilst the inclement weather and weak sentiment is making consumer demand rather unpredictable for retailers, at least shoppers are now seeing some of their cost of living pressures start to ease.”