The majority of consumers are feeling the pinch from rising prices over the past year and expect more rapid hikes to come in the next 12 months in the wake of Brexit, according to market research firm GfK.
Almost three out of four UK consumers (74%) surveyed last month think prices have risen over the past 12 months – 22 percentage points higher than a year ago.
The same percentage (74%) also expected prices to rise in the coming 12 months, with this figure up 19 percentage points compared with January 2016, the GB inflation watch survey found.
More than one in three surveyed (34%) said they expected future consumer price increases would happen “more rapidly” than the past 12 months – up from 11% that thought the same in January 2016.
The latest Grocer Price Index, measuring the price of 60,000 SKUs, revealed that deflation had come to an end in January after more than two-and-a-half years of falling prices. It follows Kantar Worldpanel recording price rises at Christmas for the first time since 2014, which have continued into the new year, with like-for-like inflation on a basket of everyday groceries climbing to 0.7%. The market research group said if prices continued to rise at the same rate for the rest of 2017, shoppers would find themselves around £27 worse off.
Joe Staton, head of market dynamics at GfK, said: “The fall in the value of the pound since the Brexit vote has fuelled speculation among both business leaders and consumers alike that we will see accelerated price inflation filter through to the high street this year.
“Consumers have already been hit by higher food and energy prices because the weakness of sterling is raising prices and reducing consumer spending power.
“This has affected a range of typical purchases from Marmite to Majorca summer holidays. A third (34%) of GB shoppers anticipate rapid rises across a wider range of goods will impact spending, making us all even savvier in comparing prices for every day purchase decisions.
“This is good news for brands that represent value-for-money in consumers’ hearts, wallets and minds, but does it mean tough times ahead for everyone else?”
Another quiet morning in the City as half term rolls on.
In wider retail, Next has announced non-executive chairman John Barton has given notice of his intention to retire and step down from the Board on 1 August 2017. The 72-year-old, who became a member of the board in 2002, was appointed deputy chairman in 2004 and chairman in 2006. Michael Roney has been appointed as an independent non-executive director, deputy chairman and chairman designate with effect from this morning. He will succeed Barton as chairman when he retires on 1 August 2017. Roney, age 62, was chief executive of Bunzl plc, a FTSE 100 listed distribution and outsourcing business, from 2005 until his retirement in April 2016. He is currently chairman of Grafton Group plc and a non-executive director of Brown-Forman Corporation.
The FTSE 100 has slipped 0.3% this morning to 7,259.79 points. Ocado has made further gains on yesterday (see below), up 1.3% to 261.5p. Greencore (GNC) is up 0.8% to 252.9p and B&M European Value Retail (BME) is also among the risers.
Yesterday in the City
A quiet start to half-term week in the City, with no news flow on the stock exchange to drive share price movements.
Heineken ended the day flat at €73.66 after rising 0.6% in the morning on the back of news it had acquired the Brazilian operations of Japanese brewer Kirin for £563m.
The FTSE 100 rose 0.3% to 7,278.92 points as Brussels lifted its official economic growth outlook for the region, but London gains were tempered by the stronger pound, according to analysts.