Retail prices increased to the highest rate recorded since November 2011 last month, accelerated by a rise in fresh food inflation in February.
The rate of shop price inflation was 1.8% in February, up from 1.5% reported in January, according to the latest BRC-Nielsen shop price index. The rise was reported as the war in Ukraine following Russia’s invasion was expected to prompt a further surge in the wider cost of living.
This stood well above the 12-month average decrease of 0.3%, as well as the six-month price increase of 0.5%, and marked the highest rate of inflation since November 2011.
Food prices remained unchanged from January’s figure of 2.7% in January. This remained above the 12-month average price growth rate of 0.7%, as well as the six-month growth rate of 1.6%. This rate is now the highest inflation rate recorded since September 2013.
Fresh food inflation also rose to 3.3% in February, marking an increase from 2.9% in January. It also remained greater than the 12-month average growth rate of 0.4%.
Non-food inflation rose to 1.3% from 0.9% in January, compared to a fall in prices of 0.2% in December, and marked a faster rate of price growth than the 12- and six-month average price declines of 0.9% and 0.1% respectively.
British Retail Consortium chief executive Helen Dickinson said: “Food inflation remained the key driver behind higher prices, particularly for fresh food which has been impacted by poor harvests, both in the UK and globally. Meanwhile, the increase from last month is a result of rising prices for non-food products, particularly health, beauty and furniture. There is little sign of change, with the Bank of England predicting price rises to continue until at least the Spring.”
“Retailers will need to keep encouraging customers to spend by offering choice, value and discounts”
NielsenIQ head of retailer and business insight Mike Watkins
“Price rises will be unwelcome news for households who already face falling disposable income because of the rise in national insurance and energy price caps. Retailers continue to face cost pressures from higher shipping rates, with crude oil prices having almost doubled over the last year. Other pressures include labour shortages, commodity price increases, and rising energy prices.”
She added: “Retailers are going to great lengths to mitigate against these price rises and support their customers, for example, many supermarkets have expanded their value ranges for food. Unfortunately, there are limits to the costs that retailers can absorb.”
NielsenIQ head of retailer and business insight Mike Watkins said: “Inflation has increased since the start of the year and the underlying trend in shop prices will be upwards over the next few months. With falling disposable income for most households, retailers will need to keep encouraging customers to spend by offering choice and value and, for some, discounts as well as added benefits for loyal shoppers.”
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