Cost of living crisis worsening as shop prices rise at fastest rate in more than a decade

The British Retail Consortium said growing shop prices reflect the impact of energy costs, the war in Ukraine and the COVID-19 lockdown in China

The British Retail Consortium said growing shop prices reflect the impact of energy costs, the war in Ukraine and the COVID-19 lockdown in China

By Alexa Philips

WED 4 MAY 2022 08:15

Source > Sky News

Shop prices increased at their fastest rate in more than a decade last month, the British Retail Consortium (BRC) has said.

Retail price growth went up from 2.1% in March to 2.7% in April, according to the BRC-NielsenIQ price index.

This was the highest annual rate of inflation it recorded since September 2011.

The figures will increase the pressure on Boris Johnson to do more to address the cost of living crisis, coming just a day before the local elections.

George Eustice, the environment secretary, acknowledged that rising prices would “undoubtedly put a pressure on household budgets” that have already been squeezed by soaring energy bills.

Mr Eustice told Sky News: “Generally speaking, what people find is by going for some of the value brands rather than own-branded products – they can actually contain and manage their household budget.”

Helen Dickinson, chief executive of the BRC, said: “The impact of rising energy prices and the conflict in Ukraine continued to feed through into April’s retail prices.

Food prices grew by 3.5% in the year to April, up from 3.3% in March.

But the increase slowed slightly for fresh food, from 3.5% in March to 3.4% in April, which Ms Dickinson attributed to “fierce competition between supermarkets”.

“Global food prices have reached record highs, seeing a 13% rise on last month alone, and even higher for cooking oils and cereals,” she said.

“As these costs filter through the supply chain, they will place further upward pressure on UK food prices in the coming months.

“Retailers will continue to do all they can to keep prices down and deliver value for their customers by limiting price rises and expanding their value ranges, but this will put pressure on them to find cost savings elsewhere.

“Unfortunately, customers should brace themselves for further price rises and a bumpy road ahead.”

Mike Watkins, head of retailer and business insight at research firm NielsenIQ, said consumers are likely to curb their spending habits in response to growing inflation and rising living costs, like energy bills.

The Bank of England has warned that inflation – which reached 7% in March – could exceed more than 8% this year.

“With food retailing no longer immune to these pressures, supermarkets are reacting by cutting the prices of some everyday grocery products,” he said.

Prices for products other than food went up by 2.2% in the year to April – the highest rate since records began in 2006.

This compares with an increase of 1.5% in the year to March.

Ms Dickinson said furniture, electricals and books are seeing the biggest surges.

“This has been exacerbated by disruption at the world’s largest seaport, following Shanghai’s recent lockdown,” she said.

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