Shop Prices Rising at Fastest Pace for 10 Years

Prices being paid in shops across the UK increased at their fastest pace for over a decade during May this year, according to a new set of figures.

The data compiled by the British Retail Consortium (BRC) and NielsenIQ reflects the pressure being put on retail businesses with energy bills having increased and the price of many imports being very much on the rise.

Food prices generally increased particularly sharply during May and by 4.3 per cent in the month, which is a notably higher pace of growth than the 3.5 per cent recorded for April.

Rising food prices are being blamed partly on the labour shortages being experienced by agricultural producers and swiftly increasing prices on fertilizer imports, partly because of Russia’s invasion of the Ukraine.

Reflecting on the recent data, Helen Dickinson from the BRC suggested that issues associated with rising shop prices may well get worse before they improve.

“It is likely to get worse before it gets better for consumers with prices continuing to rise and a further jump in energy costs coming in October,” she said.

“With little sign that the cost burden on retailers will ease any time soon, they will be left with little room for manoeuvre,” she added.

“The acceleration in food inflation reflects the fact that retailers can no longer absorb the full extent of increased supply chain costs now hitting the industry,” noted Mike Watkins from NielsenIQ.

“Promotions remain close to an all-time low and price cuts rather than volume-based offers such as multibuy are now the best way for retailers to help their shoppers manage their household budgets,” he added.

The UK’s headline rate of inflation was tracked at 9 per cent in April, with the British Chambers of Commerce describing the price rises across the economy as “eye-watering” and a huge challenge to companies across industries.

Speaking to the BBC recently, Martin McTague from the Federation of Small Businesses described rising costs as a “ticking timebomb” that could threaten the viability of many thousands of small firms over the course of this year.