London, March 1 (BNA): Shop price inflation has reached a record level in Britain amid warnings that consumers are unlikely to see prices fall again for several months.
Shop prices are now 8.4% higher than a year ago, up from 8% in January and well above the three-month average of 7.8%, according to the British Retail Consortium (BRC)-NielsenIQ Shop Price Index, dpa reported.
Food price inflation accelerated to a record 14.5% in February, up from 13.8% in January, while fresh food prices also rose 16.3% year-on-year, up from 15.7% in January.
The weakness of the pound pushed up the prices of fresh food imports from Europe, especially vegetables. Non-food inflation rose to 5.3%, compared to 5.1% last month and above the three-month average of 4.9%, with gardening tools and pet food particularly affected by cost pressures.
“Store price inflation rose to another record high as retail prices across the board continued to respond to the impact of higher energy bills, higher operating costs and tougher trading conditions resulting from the war in Ukraine,” said BRC Chief Executive Helen Dickinson. We expect to see annual inflation fall in the second half of this year, and retail prices will remain high over the coming months.”
Mike Watkins, head of retail and business insights at NielsenIQ, said: “With more than half (56%) of UK consumers feeling they are in worse financial shape than a year ago and inflation still high, many households are cutting back on non-essential spending.
“With sales volumes lower than last year, some retailers are having to work harder to encourage customer spending, including additional price cuts or promotional activity. This is likely to continue until consumer confidence begins to improve.”
FKN