Retail Prices Rising at Fastest Pace in Over 10 Years

Prices being charged to customers by the UK’s leading retailers increased at the fastest pace recorded in over decade during March.

That’s according to the latest data from the British Retail Consortium (BRC), which has said the rates of shop price inflation recorded in recent weeks were higher than they’ve been in any single month since September 2011.

Shop prices have been rising during each of the past five months, with consumers now firmly in the grip of what many are describing as a cost of living crisis.

Explaining why prices have been on the rise, the BRC’s chief executive Helen Dickinson said: “There have been mounting cost pressures throughout the supply chain for some time, including rising wages, input costs, global commodity prices, energy, and transport.” 

The war in Ukraine is also understood to be having some impact on retail prices, with the conflict there having an effect particularly on the price of wheat, as well as the wholesale price of oil.

Retail businesses are themselves feeling a financial squeeze from rising energy prices, and they also face the prospect of having to pay higher rates of National Insurance from the beginning of April.

“With cost of living increases accelerating, the next few months will be a difficult time for consumers,” said Mike Watkins, head of retailer and business insight at the data gathering company NielsenIQ.

“Rising food prices will start to impact what’s put in the shopping basket so supermarkets will need to adapt ranges to help shoppers manage what they spend on their weekly groceries.

“Whilst high street retailers will be competing for discretionary spend that’s coming under increasing pressure.”

Speaking recently in response to chancellor Rishi Sunak’s Spring Statement announcements, Ms Dickinson from BRC said the government should be doing more to support retail operators by cutting their business rates.

“The chancellor announced reforms to research and development tax credits to support business investment and increase productivity,” she said.

“However, if he wants to increase investment by retail businesses that would create jobs, increase productivity, and benefit towns and high streets, he should also focus on bringing down the unsustainable business rates burden.”