Shop price inflation hits highest level so far this year
08 Nov '07
2 min read
Year-on-Year: The BRC-Nielsen Shop Price Index (SPI) for October shows that prices were 1.1% higher than at the same time a year ago. This is the highest year-on-year rise in shop prices so far this year and caused by the continued inflationary cost pressures in food filtering through to overall prices, which showed a year-on-year rise of 3.7%, up from 2.7% in September. This is the highest rate of inflation for food since May 2007, when it was 3.8%.
Non-food prices continue to fall, although the rate of deflation has eased to -0.2% in October from -0.7% in September. The majority of this deflation in non-food is coming from clothing and footwear and electricals. Less pressure is coming from housing-related and big-ticket items.
Month-on-Month: Shop prices rose 0.5% between September and October, slightly higher than the month-on-month rise of 0.2% in August. The rise was caused by a 1.4% increase in food prices on September, the highest month-on-month rise since this survey began in December 2005. Non-food prices showed no change between September and October, as discounting and promotional activity continued.
However, despite the high level of inflation in food, non-food continues to keep overall shop price inflation down and well below the CPI, currently at 1.8%. While food price inflation is likely to remain relatively high in the coming months, as market conditions tighten, discounting in non-food is set to continue. As a result the retail industry will continue to exert strong downward pressure on the CPI.
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