UK shop price decline eases in October as hikes around Christmas loom

(Alliance News) - UK shop price deflation eased again in October, numbers on Wednesday showed, ...

Alliance News 27 October, 2021 | 5:12AM
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(Alliance News) - UK shop price deflation eased again in October, numbers on Wednesday showed, leaving consumers with the prospect of price rises during the festive period.

The UK retail sector has faced pressure from supply chain issues and material shortages. The latest British Retail Consortium-Nielsen IQ shop price index was further proof that some of these costs are being passed onto the consumer.

In October, shop prices declined 0.4% annually, easing from September's 0.5% fall.

"This is a slower rate of decline than the 12 and six-month average price decreases of 1.3% and 0.7%, respectively. This is the slowest rate of decline since January 2020," the BRC explained.

Meanwhile, food inflation accelerated to 0.5% in October from 0.1% in September. Fresh food prices alone were 0.3% higher, following 10 months in deflationary territory.

"While overall prices remain below their October 2020 levels, this is the third consecutive month of both food and non-food month-on-month rises. October food prices saw the highest rate of year-on-year inflation since November 2020, with fresh food prices rising for the first time in ten months," BRC Chief Executive Helen Dickinson commented.

"Meanwhile, in non-food, ongoing global shortages of materials and supply issues with logistics and shipping continue to put upward cost pressures on products such as furniture. It is now clear that the increased costs from labour shortages, supply chain issues and rising commodity prices have started filtering through to the consumer."

In October, non food deflation was steady at 1.0%, though slower than the 12 and six-month averages of 2.3% and 1.1%, respectively.

Dickinson added: "Tight margins mean retailers may not be able to absorb all of these new costs, so prices will continue to rise. A BRC survey showed three in five retailers expect prices to increase in the run up to Christmas, and the ongoing labour shortages are making the situation worse."

By Eric Cunha; ericcunha@alliancenews.com

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