New data shows that shoppers have seen a slowdown in store price declines in the past month, increasing the likelihood of inflation.
The BRC-NieslenIQ store price index in August showed that store prices were down 0.8% year-on-year.
However, this represents a significant slowdown from the 1.2% deflation in July, because of concerns that supply chain disruption will increase the cost of retailers, and retailers may pass on some of the costs to customers.
Helen Dickinson, Chief Executive Officer of the British Retail Consortium (BRC), said: “Although the overall retail price decline year-on-year is good news, prices have increased slightly from the previous month.
“There are some mild signs that rising costs are beginning to seep into product prices.”
Non-food deflation in August slowed to 1.2% from 1.8% in July.
Due to “global problems caused by delayed shipments and shortage of microchips,” some non-food categories, such as electrical appliances, have seen a sharp increase in inflation compared to last year.
At the same time, food prices fell 0.2% this month, lower than the 0.4% drop a month ago.
Dickinson said food retailers are struggling to keep prices down but are under pressure from “rising commodity and transportation costs and the red tape associated with Brexit”.
She added: “Low prices have been threatened, and the shortage of HGV drivers now creates an additional problem, which is a shortage of 90,000 drivers.
“So far, interference has been limited, but on Christmas Eve, the situation may get worse, and customers may see a reduction in their favorite products and gifts, and prices increase.
“The government must act quickly to rapidly increase the number of HGV driving tests, provide temporary visas for EU drivers, and change the way HGV driver training is subsidized.
“If the government does not take action, it will be British consumers who will pay the price.”
Mike Watkins, Head of Retailers and Business Insights at NielsenIQ, said: “The good news for shoppers is that store price inflation is still lower than consumer price inflation, and any moderate price increases are due to broader economic conditions and seasonal supply. Driven by change.
“As shoppers now return from summer vacation, many people will review their family budgets.
“Therefore, the next few months will be an important moment for retailers to maintain price stability by absorbing as much supply chain cost increases as possible.”
This News Originally From – The Epoch Times