UK Shop price inflation reaches six-year high

UK shop price inflation in February reached a six-year high, driven by mounting pressure in the supply chain, according to the latest BRC-Neilsen Shop Price Index.

The data shows that shop price inflation accelerated in February to 0.7 percent, up from 0.4 percent last month - the highest inflation rate since March 2013, according to the index.

The rise was driven mostly by the non-food category, which rose by 0.2 percent in February compared to a decrease of 0.2 percent in January.

“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,” Helen Dickinson, chief executive at British Retail Consortium, commented in the report.

“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, added: "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."

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