Driven in part by rising furniture and flooring prices, annual shop price inflation accelerated to +1.5% in January, up from +0.8% in December, reports BRC-NielsenIQ in its latest Shop Price Index.
This was above the 12-month average decrease of -0.6 and the six-month average price rise of +0.1%, and marks the highest rate of inflation since December 2012.
Non-Food inflation accelerated to +0.9%, compared to a fall of -0.2% in December.
Helen Dickinson OBE, chief executive of the British Retail Consortium (BRC), says: "January saw shop price inflation nearly double, driven by a sharp rise in non-food inflation. In particular, furniture and flooring saw exceptionally high demand leading to increased prices as the rising oil costs made shipping more expensive.
“The rise in shop prices is playing into wider UK inflation, which is pushing cost of living to the forefront of the political agenda. Many households will find it difficult to absorb the additional costs, as well as others on the horizon. Retailers are working hard to cut costs, but it would be impossible to protect consumers from any future rises. As commodity prices, energy prices and transportation costs continue to rise, it is inevitable that retail prices will continue to follow in the future.”
Mike Watkins, head of retailer and business insight, NielsenIQ, adds: “The surge in energy and travel costs is now impacting disposable incomes and is likely to dent consumers' willingness to spend. NielsenIQ research this month shows nearly a half of all households are saying that their most important concern at the moment is the rising cost of living. This will mean stores will need to encourage cash-strapped customers to keep shopping and, despite the increase in shop prices, retailers are responding by keeping price increases as low possible for as long as possible."
