Shop prices rose for the first time in two and a half years as the combination of supply chain disruption, labour shortages and rising commodity prices impacted consumers.

The rate of shop price inflation was 0.3% in November compared to a decrease of 0.4% in October, according to the latest BRC-Nielsen Shop Price Index. This marked the first time that prices have risen since May 2019.

Non-food deflation slowed to 0.1% in November, compared to a fall in prices of 1.0% in October. This was a slower rate of shop price decline than the 12- and 6-month average price declines of 2.0% and 1.0% respectively. It is the slowest rate of decline since May 2019.

Food prices rose by 1.1% in November, the highest rate of inflation since November 2020.

Cost of Christmas will be higher this year

British Retail Consortium chief executive Helen Dickinson said: “November saw overall year-on-year prices increase for the first time in two and a half years, driven by rising food prices, and non-food deflation slowing. The impact of labour shortages, rising commodity prices and transportation costs have now very clearly taken their hold on consumer prices.

”With food prices rising, and particularly fresh food - which saw the highest inflation since 2019 - we may find some of our Christmas shopping a little more expensive this year. Food was also affected by a rise in global food costs where certain staples, such as vegetable oil, have doubled in price in the past two years.”

She added that as the issues of labour shortage, rising fuel prices and supply chain challenges will continue for some time, the BRC anticipates the rate of inflation will also increase.

“The British public are already facing mounting costs from increasing energy prices and the looming rise in national insurance”

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Dickinson explained: ”Retailers are doing all they can to mitigate the impacts for their customers, Government also must play its part and work with industry to find long-term solutions to the labour shortages as this will help to relieve cost pressures and protect the pockets of the British public who are already facing mounting costs from increasing energy prices and the looming rise in national insurance.”

NielsenIQ head of retailer and business insight Mike Watkins said: “The significant increases in energy and travel costs are adding pressure to household budgets and the remaining weeks of the Golden Quarter could be an uncertain time for shopper spend. NielsenIQ shopper research shows that four in 10 households feel that their spending is constrained, and whilst inflationary pressures are now coming from both food and non-food, retailers continue to keep hold back increases in shop prices ahead of Christmas.”