Shop price inflation defied expectations to jump in January amid a warning that any suggestion it had peaked was “simply not borne out” by the figures.
Shop inflation overall was 1.5% higher than a year earlier – a significant increase on December’s 0.7% and the three-month average of 0.9% – as high business energy costs and the hike to National Insurance fed through to prices, according to the British Retail Consortium (BRC) and NIQ.
Inflation on non-food items rose to 0.3% against a decline of 0.6% in December, while food inflation increased to 3.9% from December’s growth of 3.3%.
BRC Chief Executive Helen Dickinson said: “Any suggestion that inflation has peaked is simply not borne out by these figures.
“It is a challenging time for households. Retailers do what they can to keep prices down in a competitive market, but thin margins and rising costs of Government policy make it harder.”
Mike Watkins, Head of Retailer & Business Insight at NIQ, added: “Shoppers are always cautious about spending in January and this will not be helped by the continuation of inflation.
“However, there are still savings to be made at the checkout as some non-food retailers are still on promotion and many food retailers continue to reduce prices on everyday items as a way to drive footfall.”