British consumers face shop price inflation
Shop price inflation in the UK hit its highest rate since 2008 in June, propelled by a sharp increase in perishable food prices. This has been brought about by soaring supply-chain costs and a decline in consumer spending, The Guardian reported on Wednesday, citing data from the British Retail Consortium BRC-NielsenIQ shop price index.
Shop prices rose by 3.1% year-on-year this month, up from 2.8% in May. Food inflation alone surged to 5.6% in June, from 4.3% the month before, while perishable food prices were up 6.2% against last year’s figures, their highest growth rate since May 2009, pushed up by the “spiraling costs of fertilizer and animal feed.”
The BRC data follows the latest figures from the UK’s Office for National Statistics, which showed that overall UK inflation soared to 9.1% in May, a 40-year high amid record fuel prices and the rising cost of food.
The situation is likely to force UK consumers change their spending habits, Mike Watkins, the head of retailer and business insight at NielsenIQ, says.
“As inflation accelerates due to rising energy, travel and now food costs, shoppers are now more likely to cut down on out-of-home consumption, shop at a fixed budget, switch to cheaper private label[s] and seek out retailers where prices are the lowest,” Watkins stated.
Still, according to BRC head Helen Dickinson, retailers are doing their best to protect customers against the soaring costs.
“Retailers are working to find more ways to protect their customers from the worst effects of inflation… Fierce competition means that retailers will continue to absorb as much of these costs pressures as possible and look for efficiencies in their businesses. Supermarkets are also expanding their value ranges to offer a wider choice for customers trading down and providing discounts to vulnerable groups,” she said, noting, however, that “if costs continue to spiral, government may need to find ways to help retail businesses support their customers.”
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