UK shop price inflation slows despite cost pressures for retailers
(Alliance News) - UK shop price growth decelerated in September, as retailers continued to absorb "wave after wave of extra costs," the British Retail Consortium and NielsenIQ reported on Tuesday.
According to the BRC-NIQ shop price monitor for this month, which covers the week from September 1 to September 7, shop price inflation decreased to 1.4% year on year in September.
This was above the three-month average of 1.3%, but a slowdown from growth of 1.5% in August.
Non-food inflation slowed to 0.8% in September from 0.9% in August, but was above the three-month average of 0.6%. Food inflation decreased to 2.5% in September, in line with the three-month average, from 2.8% in August.
Fresh food prices grew 2.6% on-year, below the three-month average of 2.9% and down from growth of 3.0% in August. Ambient food inflation decreased to 2.2% from 2.5%, but was above the average of 1.9%.
"Shop price inflation edged down this month, with food inflation falling as competition between retailers continued to deliver value for shoppers," commented BRC Chief Executive Helen Dickinson. "Promotions helped bring down meat and dairy prices, though poor harvests across Europe pushed up fruit prices and high global commodity prices kept chocolate and confectionery prices elevated. In non-food, strong discounting reduced the cost of back-to-school essentials, including books, stationery, footwear and electricals.
"Retailers have absorbed wave after wave of extra costs, but there is a limit to what businesses can shoulder. With higher business rates set to hit in April, alongside rising employment costs, energy bills and packaging taxes, the budget is a fork in the road. The chancellor can help keep prices down by freezing the rates rise and removing shops from the business rates surtax, or risk pushing even more costs onto consumers."
NIQ's Head of Retailer & Business Insight Mike Watkins, meanwhile, noted: "Q4 is expected to bring tighter household budgeting so retailers will still need to absorb cost increases wherever possible."
By Emma Curzon, Alliance News reporter
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