Food price inflation is expected to climb above 4 per cent this year, the British Retail Consortium (BRC) has warned, in a sharp reversal of the recent trend of slowing shop prices.
According to the lobby group’s forecasts, prices at the supermarket tills will surge by an average of 4.2 per cent in the second half of the year.
Helen Dickinson, chief executive of the BRC, attributed the looming price increases to rising employer national insurance contributions, higher national living wage rates, and fresh packaging levies, all of which will leave little scope for retailers to absorb the additional burden. “There is little hope of prices going anywhere but up,” she said, urging the government to ensure that its planned shake-up of business rates does not inflict further costs on shops already under pressure.
The BRC’s alarm comes despite evidence that overall shop prices fell by 1 per cent last month, a faster decline than the 0.6 per cent recorded in November. Non-food items dropped by 2.4 per cent year on year, although the later timing of Black Friday in 2024 compared with the previous year may have distorted the figures by boosting discounting activity.
Dickinson noted that while food inflation appeared to have bottomed out at 1.8 per cent, it is now poised to climb again: “With many price pressures on the horizon, shop price deflation is likely to become a thing of the past.”
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