Hot summer hits crops
Shoppers facing first hike in prices in more than five years
Prices are rising in the shops (pic: Terry Murden)
Shoppers are paying for the long,hot summer with the first hike in prices in more than five years.
Dry weather reduced crop yields and followed a rise in the price of oil and agricultural products on global markets earlier in the year.
Shop Prices increased by 0.1% in August against a decrease of 0.3% in July. This broke a deflation cycle of 63 months.
Helen Dickinson, chief executive of the British Retail Consortium, said: “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: “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.”
David Lonsdale, director of the Scottish Retail Consortium, commented: “Shop prices have returned to inflationary territory, after five years of falling prices at tills. The industry is working hard to keep prices down, but with higher global food commodity prices and other costs, retailers are now regrettably being forced to pass some of this onto customers.
“That’s why support for Scottish consumers ought to be at the heart of the devolved government’s upcoming Budget, with income tax rises ruled out and the introduction of a zero-rate income tax band accelerated.”