// UK retailers have said shop price inflation has yet to peak this year, with the cost of basic essentials expected to remain high
// The BRC flagged big rises in sugar and alcohol in the past month, as well as fruit and vegetables
Shop prices have yet to reach their peak – despite reaching record highs last month, The British Retail Consortium (BRC) has warned.
Prices are now 8% higher than they were last January, up from 7.3% in December and above the three-month average of 7.5%, according to the BRC-NielsenIQ Shop Price Index.
Overall food inflation rose to 13.8% from 13.3% in December – the highest inflation rate in the category on record.
The BRC said the price of food and drink, clothing and other items sold in shops and online would continue to rise at a rapid pace, even if the UK’s official inflation rate for all goods and services falls in the coming months.
BRC chief executive Helen Dickinson said: “With global food costs coming down from their 2022 high and the cost of oil falling, we expect to see some inflationary pressures easing.
“As retailers still face ongoing headwinds from rising energy bills and labour shortages, prices are yet to peak and will likely remain high in the near term as a result.”
She said a fall in the global price of oil and food from higher levels last year would help to ease some of the inflationary pressures.
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But, the UK’s official inflation rate – which measures annual price growth in retail but also more widely in restaurant meals, energy bills, and haircuts – has fallen back from a peak of 11.1% in October to just over 10% in December.
However, food price inflation in particular has soared as producers pass on the cost of higher energy bills and raw materials.
The BRC flagged big rises in sugar and alcohol in the past month, as well as fruit and vegetables.
Meanwhile, clothing and footwear prices eased, which meant shoppers will have been able to restock their wardrobes during the January sales.
It comes after figures from Kantar showed grocery price inflation reached the highest level since 2008 – 16.7% in the four weeks to 22 January, adding nearly £800 to the typical annual shopping bill, with the price of milk, eggs and dog food rising fastest.
The figure was up from 14.4% in December and has reached the highest level since Kantar began tracking the figures in 2008.
The data found that Brits have been shifting away from branded foods and shopping for more lower-priced own-brand equivalents. Sales of own-label products rose 47% over the last year.
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