Food inflation rose 0.6 per cent last month compared with a month previously as financial pressures on consumers and retailers alike continue to build, according to new figures released today.
Overall shop price inflation remained flat in November at 1.5 per cent according to the BRC-Nielsen Shop Price Index while non-food inflation declined 0.3 per cent after October’s broadly flat figure.
While consumers will fear a further price rise on everyday essentials, the British Retail Consortium (BRC)’s Director General Stephen Robertson explained that the ongoing price war among leading supermarkets will relieve pressure on consumer spending.
Robertson explained: “Costs for commodities such as wheat and corn have eased off since peaking earlier in the year but these pressures, coupled with the impact of poor harvests, are continuing to filter through to fresh foods, with meat, fish and vegetables hit particularly hard.
“This needn’t mean that turkey or trimmings are off the menu this Christmas.
“The fierce competition to secure Christmas spending should shield customers from the full impact of rising costs and ensure that they still get a good deal on seasonal fare.”
In non-food, deceleration has been driven by clothing and electrical goods which Robertson pointed out will allow many to stretch their festive budgets further, though with non-food prices down year-on-year for nine months of this year, retailers’ margins are set to be detrimentally affected by the figure.
Mike Watkins, Senior Manager of Retailer Services at Nielsen said: “With Christmas trading underway, non-food retailers are already discounting in order to drive footfall and supermarket retailers will be concerned about the inflationary pressures that are building, and whether this impacts the motivation of the already cautious consumer.
“With weak consumer spending, all retailers will now be reviewing how much more to use promotional activity to encourage shoppers to buy over the next three weeks.”