According to data out today from NielsenIQ the overall shop price index rose for the first time since May 2019, increasing 0.3 percent in November. Food prices are proving a key driver with inflation accelerating to 1.1 percent overall in November, up from 0.5 percent in October. In a blow for those gathering ingredients for Christmas dinner fresh, food inflation in particular stood at 1.2 percent for November. This is its highest rate since August 2019.
Chief executive of the British Retail Consortium, Helen Dickinson commented: “The impact of labour shortages, rising commodity prices and transportation costs have now very clearly taken their hold on consumer prices.
“With food prices rising, and particularly fresh food – which saw the highest inflation since 2019 – we may find some of our Christmas shopping a little more expensive this year.
“Food was also affected by a rise in global food costs where certain staples, such as vegetable oil, have doubled in price in the past two years.”
Growth in the price of non-food products had previously been declining with a fall of 1 percent in October.
Now however that decline has slowed to only 0.1 percent as increased costs start to filter through.
Head of Retailer and Business Insight at NielsenIQ, Mike Watkins explained: “The significant increases in energy and travel costs are adding pressure to household budgets and the remaining weeks of the Golden Quarter could be an uncertain time for shopper spend.
“NielsenIQ shopper research shows that 4 in 10 households feel that their spending is constrained and whilst inflationary pressures are now coming from both food and non-food, retailers continue to keep hold back increases in shop prices ahead of Christmas.”
Both the British Retail Consortium and British Chambers of Commerce have forecast high numbers of firms putting up prices in the coming months.
The outlook post-Christmas is also set to be bleak with many forecasts of further price rises to come in the New Year.
Ms Dickinson warned: “Retailers are doing all they can to mitigate the impacts for their customers, Government also must play its part and work with industry to find long-term solutions to the labour shortages as this will help to relieve cost pressures and protect the pockets of the British public who are already facing mounting costs from increasing energy prices and the looming rise in national insurance.”
Continued cost pressures will make things increasingly hard for firms still managing to resist passing on costs to consumers.
Speaking to Express.co.uk recently CEO of Lidl GB Christian Hartnagel confirmed the store would aim to keep price rises down but warned: “Inflationary pressure is definitely on, it’s definitely on us as a business, we see it everywhere in transport, in raw materials in labour costs, in energy.
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Elsewhere in Europe Christmas shopping is also set to get more expensive.
In inflation figures out from Germany this week food prices grew 4.5 percent in November.
France and Poland have also both seen inflation reach record levels whilst Eurozone inflation overall soared to more than twice the European Central Bank’s two percent target to 4.9 percent.
Within this food, alcohol and tobacco was up 2.2 percent.