Retail Price Hikes In UK Soar To A 12 Year High
Retail price hikes in the United Kingdom have reached a new high since January.
According to the British Retail Consortium (BRC), prices increased by 1.5% in January compared with the same month last year — the biggest increase since December 2012 and nearly double the 0.8% increase observed in December 2021.
British consumers saw food prices increase by 2.7%, a new high since October 2013, due to poor harvest, rising global food prices and labor shortages, BRC noted. Price increases for non-food products were even higher, rising by 0.9%, with furniture and flooring products seeing the highest demand.
These increases were largely driven by inflation, which reached a 30-year high at 5.4% in December 2021. This was 3% higher than Bank of England’s 2% target — a problem that will likely have a negative impact on demand for non-essential products in 2022.
“The rise in shop prices is playing into wider UK inflation, which is pushing cost of living to the forefront of the political agenda. Many households will find it difficult to absorb the additional costs, as well as others on the horizon,” said Helen Dickinson OBE, CEO of BRC.
“Retailers are working hard to cut costs, but it would be impossible to protect consumers from any future rises. As commodity prices, energy prices and transportation costs continue to rise, it is inevitable that retail prices will continue to follow in the future.
According to NielsenIQ, almost half of all British households see rising living costs as their most important concern.
“The surge in energy and travel costs is now impacting disposable incomes and is likely to dent consumers’ willingness to spend,” said Mike Watkins, head of retailer and business insight at NielsenIQ.