Data: Rising shop prices pose threat to Christmas season

The rate of shop price deflation was 0.4% in October compared with a decrease of 0.5% in September, according to the latest BRC-Nielsen Shop Price Index. 

This was the slowest rate of decline since January 2020.

Non-food was steady at 1% in October, marking a slower rate of shop price decline than the 12- and six-month average price declines of 2.3% and 1.1% respectively.

Food prices rose by 0.5%, accelerating from 0.1% the previous month and resulting in the highest rate of inflation since November 2020.

Fresh food prices inflated for the first time in 10 months, up 0.3%, while ambient food kept a steady rate of inflation at 0.8%, the same as the previous month.

British Retail Consortium (BRC) chief executive Helen Dickinson 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 10 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.”

Dickinson warned that three in five retailers said they expect prices to rise in the lead up to the festive season.

Nielsen head of retailer and business insight Mike Watkins added: “With food prices slowly increasing, we can expect shoppers to start to rebalance basket spend over the next few weeks, particularly with increased concerns about discretionary spend.

”And, with consumer sentiment now more cautious, we cannot ignore that availability issues are still top of mind.

”So consumers will be uncertain about when and where to spend, and with Christmas promotions about to kick in competition will intensify in both food and non-food retailing.”

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