Higher prices are likely in run up to Christmas, BRC reveals

Higher shop prices are expected in the run up to Christmas, according to a new report by the British Retail Consortium (BRC). 

The research reveals how factors such as increased cost from labour shortages, supply chain issues and rising commodity prices have started filtering through to the consumer.

Shop price annual deflation eased to 0.4 per cent in October compared to September’s decrease of 0.5 per cent, a slower rate of decline than the 12 and six month average price decreases of 1.3 per cent and 0.7 per cent, respectively. 

BRC revealed overall prices are still lower than this time last year, but food prices this month saw their highest rate of year-on-year inflation at 0.5 per cent, since November 2020.

READ MORE: Brits to spend less this Christmas amid rising sales scepticism, report reveals

Fresh food prices rose for the first time in 10 months, by 0.3 per cent.

This follows 10 months of deflation, while ongoing worldwide shortages of materials and logistical supply issues continue to put cost pressure on products such as furniture.

“Tight margins mean retailers may not be able to absorb all of these new costs, so prices will continue to rise,” British Retail Consortium chief executive Helen Dickinson OBE said. 

“A BRC survey showed three in five retailers expect prices to increase in the run up to Christmas, and the ongoing labour shortages are making the situation worse. 

“Retailers continue to do all they can to ensure value for money for customers and are looking to work with the government to find a long-term solution to these shortages, otherwise it is the British consumer, who already face higher energy bills this winter, who will suffer the consequences.”

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