Shop price inflation reaches record high according to new figures

Shop price inflation has reached a record high amid warnings that consumers are unlikely to see prices dropping again for months.

Shop prices are now 8.4% higher than they were a year ago, up from an 8% increase in January and well above the three-month average of 7.8%, according to the British Retail Consortium (BRC)-NielsenIQ Shop Price Index.

Food inflation accelerated to a record 14.5% in February, up from 13.8% in January, whilst fresh food prices are also now a record 16.3% higher than a year ago, up from 15.7% in January.

Inflation on products other than food hit a high of 5.3%, up from 5.1% last month and above the three-month average of 4.9%, with gardening tools and pet food particularly affected by cost pressures.

Helen Dickinson, British Retail Consortium CEO, said: “Shop price inflation rose to another record high as retail prices across the board continued to react to the impact of soaring energy bills, higher running costs and tougher trading conditions brought about by the war in Ukraine.

“While we expect to see the annual inflation rate reduce in the second half of this year, retail prices will remain high over the coming months.”

Mike Watkins, Head of Retailer and Business Insight at NielsenIQ, said: “With more than half of UK consumers (56%) feeling they are in a worse financial position compared to a year ago and inflation still stubbornly high, many households are trimming back on non-essential spending.

“And as volume sales are down on last year, some retailers are having to work even harder to encourage customer spend, including additional price cuts or promotional activity. This is likely to continue until consumer confidence starts to improve.”