Shop price inflation in February rose by the highest rate in almost six years, driven by cost pressures building in the supply chain, new figures have shown.
The BRC-Nielsen Shop Price Index (SPI) has revealed that shops increased prices year on year by 0.7%, compared to a decrease of 0.8% in February. It is the highest inflation rate since March 2013.
Non-food prices rose by 0.2% year on year in February, up from a decline of 2.2% in the same period the year before. This is the first time that non-food prices have been inflationary since March 2013.
Helen Dickinson, chief executive at British Retail Consortium, said: “For the first time in almost six years the price of non-food goods rose, albeit slowly, as cost pressures which had been building in the supply chain over the past few years fed through into prices.
“While price rises over the last six months have been relatively modest, a no-deal Brexit would have a much more immediate and dramatic effect. If this happens, prices of both food and non-food would rise as a result of any new tariffs, the cost impact of any delays at borders, increased administration, and the likely currency depreciation. Parliament must protect British consumers by agreeing a solution that avoids a chaotic no-deal Brexit.”
Mike Watkins, head of retailer and business insight at Nielsen, said: “Whilst shop prices have moved upwards slightly in February, economic growth is slowing and there is still weak retail growth. So, for as long as shoppers continue to be cautious, it will be difficult for the industry to pass on in full any cost price increases coming through the supply chain, particularly as around half of households are still reluctant to spend and many have concerns about the economy. Retailers will need to simplify the shopper experience, improve customer engagement and deliver good value for money to encourage shoppers to spend.”