Shop price inflation hits six-year high

Shop price inflation increased by 0.7% in February, up from 0.4% in January, and is the highest inflation rate since March 2013.

According to the BRC, non-food prices rose by 0.2% year-on-year during the month, compared with the January decrease of 0.2%. Additionally, food inflation rose slightly to 1.6%, up from 1.5% in January, with fresh food inflation also increasing to 1.7% in February, up from 1.2% last month.

The BRC said February is usually a month when non-food retailers introduce new products at full price after a January of “clearing stock and deep discounting”, and added that it’s “no surprise” that non-food prices are higher month-on-month.

In contrast, the trade association said non-food prices are higher year-on-year for the first time in six years, and reflects the “ongoing slow release” of significant cost pressures which have built up in the supply chain over the last two years – notably from the currency depreciation in 2016 and the rise in oil prices last year.

BRC CEO Helen Dickinson 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.

“This adds to gradual ongoing rises in food prices, resulting in the highest overall shop price inflation since March 2013. 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.”

She added: “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.”

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