Shop price inflation rose to 2.1 per cent year on year in October, up from 1.4 per cent in September and above the three-month average of 1.6 per cent, according to the latest figures from the BRC.
Non-food inflation saw a particularly sharp increase, climbing to 1.7 per cent in October from 0.8 per cent the previous month, reaching its highest level in almost three years.
The increase comes as retailers continue to face rising energy, transport and employment costs, alongside pressures from business rates and packaging taxes.
Helen Dickinson, Chief Executive of the BRC, said: “The dam is starting to break on the huge wave of costs retailers have absorbed over the last two years. Non-food inflation climbed to an almost three-year peak as high energy and transport costs pushed up prices with furniture, flooring and DIY particularly affected this month.”
With the Autumn Budget approaching, the BRC is urging the Government to introduce measures to ease the financial burden on retailers and prevent further price increases being passed on to consumers.
“The message to the Chancellor ahead of tomorrow’s Budget could not be clearer: act now or prices will keep on rising,” Ms Dickinson continued.
“Retailers cannot endlessly swallow higher business rates, employment costs, energy bills, and packaging taxes.”
The BRC is calling for a reduction in employment costs, the cancellation of a planned 3.5 per cent business rates increase and the removal of shops from the high-value business rates surtax.
Elsewhere, food inflation also increased, with ambient food prices rising by 3.2 per cent year on year in October, compared with 2.2 per cent in September.
Fresh food inflation remained unchanged at 2.6 per cent.
Mike Watkins, Head of Retailer and Business Insight at NIQ, said: “With global supply chain pressures building over the last six months, higher inflation across retail was to be expected.”
He added that price reductions by food retailers since the end of summer had delayed some of the impact, while non-food retailers were likely to become increasingly reliant on promotions to encourage spending.
“High street retailers, faced with consumers becoming more cautious in the face of higher energy and fuel costs, will now be more reliant on promotions to drive discretionary non-food spend.”
The latest figures come at a crucial time for the retail sector as businesses prepare for the Christmas trading period, with concerns that continued price increases could put further pressure on household budgets and discretionary spending.
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