For the first time in over five years, shop prices have been pushed into inflationary territory.
Latest figures from the British Retail Consortium show that in August shop prices increased by 0.1 per cent, up from the July decrease of 0.3 per cent. This is the first time they have increased since April 2013.
Higher food inflation is the result of both the spell of hot, dry, weather this summer, which reduced yields of some foods produced in the UK, and the increases in the prices of oil and agricultural products on global markets earlier in the year.
Helen Dickinson OBE, Chief Executive, British Retail Consortium, says: “Despite significant increases in costs in the supply chain, this month’s figures show that retailers are keeping price increases faced by consumers to a minimum. However, current inflationary pressures pale in comparison to potential increases in costs retailers will face in the event the we leave the EU without a deal. If that does happen retailers will not be able to shield consumers from price increases.
“The EU and UK negotiating teams must deliver a Withdrawal Agreement in the coming weeks to avoid the severe consequences that would result from such a cliff edge scenario next March.”
Mike Watkins, Head of Retailer and Business Insight, Nielsen adds: “With the recent hot summer weather, shoppers have been visiting food stores more often and purchasing more food and drink, with promotional offers helping to limit the impact of some cost increases coming through the supply chain. So it’s of no surprise that shop price inflation is a little higher this month. The challenges for the high street are different with less opportunity to stimulate demand. However, compared to the recent increase seen in the CPI, there is still limited inflationary pressure coming from retail at the moment.”
The news is a welcome relief for the retail sector, which has been squeezed for some time by competitive price pressures, increased costs and consumer caution.
But, in order to survive and thrive in these challenging times, business owners need accurate, reliable and timely financial information, whether that be profit or cash focused, or both, to accurately and effectively manage the company’s finances and drive growth.
At Beavis Morgan, our retail business experts can help you identify your requirements and then design and implement a system that will provide all the information you need, within a cost effective and efficient framework.
Being able to understand and evaluate your business through real-time information on actual performance is critical and could mean the difference between survival and business failure.
To find out more about how we can assist you and your retail business, contact Steve Govey or your usual Beavis Morgan Partner.
Further reading: Retailers must evolve in order to survive