Published on September 2nd, 2021 | by The GC Team0
Low prices under threat
Indications that rising costs are starting to filter through into retail prices can be seen in new data published by the British Retail Consortium this week.
Shop Price deflation eased to 0.8% year-on-year in August compared to July’s decrease of 1.2%, with some Non-Food categories such as electricals seeing sharp rises in inflation compared to last year due to global issues arising from delayed shipping and shortages of microchips, while Food retailers are said to be “fighting to keep their prices down as far as possible”.
Although the rate of decline in August was slower than the 12- and 6-month average price decreases of 1.5% and 1.2% respectively, Helen Dickinson, Chief Executive of the BRC, said mounting pressures from rising commodity and shipping costs as well as Brexit-related red tape mean this will not be sustainable for much longer, and Food price rises are likely in the coming months.
“Low prices are already under threat, and now the HGV driver shortage has created an additional problem with a shortfall of 90,000 drivers,” she commented.
Dickinson added that disruption has been limited so far, but in the run up to Christmas the situation could get worse and customers may see reduced choice and increased prices for products and presents.
Mike Watkins, Head of Retailer and Business Insight at NielsenIQ, said the next few months will be an important time for retailers to keep prices stable by absorbing as much of any increase in their supply chain costs as possible.
“With shoppers now returning from their summer holidays many will be reviewing their household budgets,” he said.