Pressures on costs filter into price rises, says new report

Pressures on retailers’ costs are filtering into price rises for shoppers, according to a new report by the British Retail Consortium (BRC), published via the BRC-NielsenIQ Shop Price Index for September 2021.

Shop Price annual deflation eased to 0.5% in September compared to August’s decrease of 0.8%. This is a slower rate of decline than the 12- and 6-month average price decreases of 1.4% and 0.8%, respectively. This is the slowest rate of decline since January 2020.

Non-Food deflation slowed to 1.0% in September, compared to a fall of 1.2% in August. This is a slower rate of decline than the 12- and 6-month average price declines of 2.4% and 1.2%, respectively.

Helen Dickinson OBE, Chief Executive, British Retail Consortium, said: “September saw overall prices fall, but the decline is slowing. There are now clear signs the months-long cost pressures from rising transport costs, labour shortages, Brexit red-tape, and commodity costs are starting to filter through to consumer prices.

“Food prices rose year-on-year for the first time in six months, and some non-food products, such as DIY & gardening, are seeing the highest rate of inflation since summer 2018. Other product ranges, such as furniture and electricals, have also seen annual prices rise for consecutive months, which is indicative of unresolved shipping issues coupled with high demand.

“It is inevitable that prices will continue to rise, but Government intervention would minimise the impact on consumers. Supply chains have been put to the test recently, with CO2 and HGV shortages.

“The Government needs to find a long-term solution to the HGV driver shortage by expanding the size and scope of the new visa scheme for drivers from abroad so they can fill the gaps while new British drivers are trained. Without this, these additional burdens to what is already a precarious trading environment, will affect the British consumer and the prices they pay for the goods they want and need.”