Shop price inflation stays steady but obstacles to come in 2024
Shop price annual inflation stayed flat at 4.3 per cent in December, according to the British Retail Consortium (BRC) and Nielsen IQ shop price index.
This was below the three-month average of 4.6 per cent and the lowest level since mid-2022.
“Households did have reason to celebrate as food inflation fell for the eighth consecutive month thanks to retailers’ efforts to bring down prices in the run-up to Christmas,” said Helen Dickinson, chief executive of the BRC.
“There was cause for merriment as prices of wine, port and sherry fell on the month,” she added.
Food inflation slowed to 6.7 per cent last month, down from 7.7 per cent in November, continuing the trend of eight consecutive decreases.
Fresh and ambient food inflation both also slowed to 5.4 and 8.4 per cent, respectively.
According to Mike Watkins, head of retailer and business Insight at NielsenIQ, a lot of pressure pushed discretionary spending in December.
“And price discounting was deeper and began earlier not just in the non-food channel but also in food retail, where promotions got back to a four-year high at the end of the year,” he explained.
But a rise in non-food inflation from 2.5 per cent in November to 3.1 per cent in December nudged it just above the three-month average rate of three per cent.
Dickinson warned there are hurdles on the road ahead in 2024 too.
She said: “New border checks for EU imports, hundreds of millions more on business rates bills from April.
“Government should think twice before imposing new costs on retail businesses that would not only hold back vital investment in local communities, but also push up prices for struggling households.”