Price rises to pick up momentum in 2022
Helen Dickinson OBE, chief executive said consumer prices will continue to rise, and at a faster rate, since retailers can no longer absorb the cost pressures arising from expensive transportation, labour shortages, and rising commodity and global food prices.
Shop price annual inflation accelerated to 0.8% in December, up from 0.3% in November with prices set to rise in the new year, according to a latest study from the BRC.
The increase of 0.3% is above the 12 and six month average price decreases of 0.9% and 0.3%, respectively. Following November’s rise, this is the second time that prices have risen since May 2019.
The association also found non-food deflation accelerated to 0.2% in December compared to the decline of 0.1% in November. This is a slower rate of decline than the 12 and six month average price declines of 1.7% and 0.9%, respectively.
Food inflation accelerated to 2.4% in December, up from 1.1% in November. This is above the 12- and six month average price growth rates of 0.3% and 0.6%, respectively. This is the highest inflation rate since March 2019.
According to the BRC, fresh food inflation increase to 3% in December, up from 1.2% in November, showing the highest inflation rate since April 2013
Helen Dickinson OBE, chief executive of the BRC, said: “The trajectory for consumer prices is very clear: they will continue to rise, and at a faster rate. Retailers can no longer absorb all the cost pressures arising from more expensive transportation, labour shortages, and rising commodity and global food prices.
“Consumers will already be harder pressed this year, with rising energy bills, the looming hike in national insurance, and more expensive mortgages. Government should relieve some of these costs by looking for long-term solutions for resolvable issues such as labour shortages.”
Mike Watkins, head of Retailer and Business Insight, NielsenIQ, added: “But it is weak consumer confidence and uncertainty around the pandemic rather than shop price inflation which will have the biggest impact on demand at the start of the year.”
