UK retail prices were lower in November but not enough to end 17 months of retail inflation in the UK as retailers warned of higher prices for consumers.
According to the latest data from the British Retail Consortium (BRC)-NielsenIQ Shop Price Index, retail prices fell by 0.6% in November compared to last year. While this represents a slowdown from October's 0.8% year-on-year decline, it is the first time in 17 months that retail inflation has increased month-on-month. This trend reversal indicates that prices may increase for consumers in the coming months.
Fresh food prices rose slightly, rising 1.2% compared to November 2023, up from 1% in October. The main causes of the increase include seafood, which faces higher import and processing costs during the winter months, and tea, which has suffered from poor harvests in key producing areas. Coffee prices, on the other hand, fell slightly but are expected to rise again as global bean prices are close to record highs. Despite this, overall food inflation eased to 1.8% in November, down from 1.9% in October.
Read more: Black Friday scams and how to avoid them
Prices of non-food products, however, continued to fall in currency, falling 1.8% year-on-year, although this was an improvement from a 2.1% decline. Retailers have been scaling back their discounting practices, but deals are still available across categories such as fashion, furniture, and electronics, with many retailers offering early Black Friday deals.
BRC chief executive Helen Dickinson said the November figures marked a turnaround, saying: “November was the first time in 17 months that retail inflation was higher than the previous month, although it remains in negative territory.
“With more price pressures on the horizon, November's figures may signal the end of inflation.
“The industry faces additional costs of £7bn by 2025 due to changes in employers' national insurance premiums, business rates, increases in the minimum wage and a new packaging tax.
“Stores are already operating on thin margins, so these new costs will lead to higher prices.”
Mike Watkins, head of marketing and business intelligence at NielsenIQ, noted that consumers remain cautious, making many of the most important purchases while holding back on discretionary spending.
Read more: More than 6 million UK consumers were scammed online in the last year
He said: “Consumers are still cautious about buying essentials and holding back their discretionary spending, so the low rate of inflation should help boost confidence ahead of the Black Friday boost.
Source link
