Cost of living crisis to hit 2022 as fresh food prices rise at fastest rate since 2013

Martin Lewis provides advice on cutting fuel costs

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Shop price inflation rose to 0.8 percent in December, more than doubling November’s figure of 0.3 percent according to the latest figures from the British Retail Consortium (BRC) and NielsenIQ Shop Price Index. After November’s rise this is only the second time prices have risen since May 2019. Food prices in particular have lead the overall rises in consumer prices. According to the data food inflation rose to 2.4 percent in December from 1.1 percent in November, the highest rate since March 2019.

Within this category fresh food saw the biggest price rises, up three percent compared to 1.2 percent in November.

This marked the highest rate of inflation since April 2013.

Chief Executive of the BRC, Helen Dickinson said: “Consumers may have noticed that their Christmas shop became a little more expensive in December.

“Not only did prices rise, but did so at a faster rate, especially in food.”

The price rises of November and December reverse previous declines in prices with fresh food previously falling -0.2 percent on a 12 month average.

Looking forward Ms Dickinson warned: “The trajectory for consumer prices is very clear: they will continue to rise, and at a faster rate.

“Retailers can no longer absorb all the cost pressures arising from more expensive transportation, labour shortages, and rising commodity and global food prices.

“Consumers will already be harder pressed this year, with rising energy bills, the looming hike in national insurance, and more expensive mortgages.

“Government should relieve some of these costs by looking for long-term solutions for resolvable issues such as labour shortages.”

Retailers have already been spotted passing on price increases with IKEA found last week to have raised the prices of some products as much as 50 percent.

The BRC had previously noted in surveys of members that three out of five expected to begin increasing prices by the end of 2021.

Rising shop prices comes amid warnings over significant increases to energy bills in April when the price cap is increased as well as increases to National Insurance.

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Money Saving Expert founder Martin Lewis told the PA news agency the results would leave people with a choice between “heating or eating.”

Pressures on the cost of living will also spell bad news for retailers who had previously enjoyed a return to the high street last year while Covid restrictions relaxed.

Mike Watkins, Head of Retailer and Business Insight at NielsenIQ said: “After a challenging Christmas period, consumers are facing higher energy, travel and for some mortgage costs and the underlying price inflation in retail may only make it more difficult to entice shoppers to spend in January.

“But it is weak consumer confidence and uncertainty around the pandemic rather than shop price inflation which will have the biggest impact on demand at the start of the year.”

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