Rising costs making it hard for retailers to keep prices down

New data from the British Retail Consortium has highlighted the increasing difficulty on keeping costs down for retailers.

It comes as inflation continues to rise higher than growth across many retail segments.

The figures show that shop price inflation increased to 1.2% year on year in May, against growth of 1% in Apri, which is above the 3-month average of 1.1%.

Non-food inflation increased to 0.5% in May, also against a decline of -0.1% in April. This is above the 3-month average of 0.1%.

Food inflation actually decreased to 2.7% in May, against a growth of 3.1% in April. The 3-month average for food is 3.1%.

Reflecting on the data, Helen Dickinson, the BRC’s chief executive, said it was becoming more and more difficult for retailers to keep costs at a reasonable level for the consumer.

She explained: “Shop price inflation edged up in May as non-food prices rose. Furniture and health & beauty saw the sharpest increases, driven by rising raw material and shipping costs. Customers were still able to find bargains, with prices for TVs and audiovisual equipment falling as retailers help people get World Cup ready. Households did benefit from food inflation falling to its lowest level in a year, as intense competition among supermarkets continued to deliver value and savings.”

She concluded: “While retailers work hard to keep prices down for customers, they continue to face significant cost pressures, including higher energy bills and disruption linked to the conflict in Iran. Businesses cannot absorb these costs indefinitely, which risks pushing prices higher in the months ahead.

“To help protect households, Government should take action to reduce business costs. Reducing the non-commodity charges, taxes and levies that make up more than two-thirds of energy bills, and cutting red tape would help keep inflation down.”