News

01 Sep 2021

Are price rises imminent?

Prices rises are looming, according to the British Retail Consortium (BRC).

The BRC, along with NielsenIQ, has released its Shop Price Index for August 2021. 

Key points from the report include: 

  • Shop Price deflation eased to 0.8% year-on-year in August compared to July’s decrease of 1.2%. This is a slower rate of decline than the 12- and 6-month average price decreases of 1.5% and 1.2%, respectively.
  • Non-Food deflation slowed to 1.2% in August, compared to a fall of 1.8% in July. This is a slower rate of decline than the 12- and 6-month average price declines of 2.6% and 1.8%, respectively.
  • Food deflation decelerated to 0.2% in August from July’s deflation of 0.4%. This is the fifth consecutive month when Food prices fell. This is below the 12-month average price growth rate of 0.3% and in line with the 6-month average price growth rate of -0.2%.
  • Fresh Food prices fell for the nineth consecutive month in August, with deflation easing to 0.6% from a decline of 1.0% in July. This is in line with the 12-month average price growth rate of -0.6% and below the 6-month average price growth of -0.9%.
  • Ambient Food inflation eased to 0.3% in August, down from 0.5% in July. This is the lowest rate of inflation for the category since January 2017. This is below the 12- and 6-month average price increases of 1.5% and 0.8%, respectively.

Helen Dickinson OBE, Chief Executive, British Retail Consortium, said: “While it is good news that overall retail prices fell year-on-year, there was a slight rise in prices on the previous month. There are some modest indications that rising costs are starting to filter through into product prices. Some of the Non-Food categories, such as electricals, saw sharp rises in inflation compared to last year, owing to global issues from delayed shipping and shortages of microchips. Food retailers are fighting to keep their prices down as far as possible. But mounting pressures – from rising commodity and shipping costs as well as Brexit-related red tape, mean this will not be sustainable for much longer, and Food price rises are likely in the coming months.

“Low prices are already under threat, and now the HGV driver shortage has created an additional problem with a shortfall of 90,000 drivers. Disruption has been limited so far, but in the run up to Christmas the situation could get worse, and customers may see reduced choice and increased prices for their favourite products and presents. The Government must act swiftly and rapidly increase the number of HGV driving tests taking place, provide temporary visas for EU drivers, and make changes on how HGV driver training can be funded. Without Government action, it will be the British consumers who will pay the price.”

Download the full report here

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