Inflation in shops ramped up in September as price hikes on DIY and gardening tools offset stabilising food prices.
Annual shop price inflation rose to 1.4% in September, up from 0.9% in August, according to the latest monthly index from the British Retail Consortium and NIQ.
This was largely fuelled by rising non-food prices, with food inflation holding steady at 4.2%, ending seven months of successive growth.
The BRC said 18 months of deflation on non-food goods looked set to end, with prices just 0.1% lower in September compared with an annual drop of 0.8% in August.
DIY and gardening tools saw the sharpest price rises, while promotions on electrical items like laptops helped keep some prices low.
“Households are finding shopping increasingly expensive. The impact on retailers and their supply chain of both global factors and higher National Insurance and wage costs is playing out in prices for consumers,” said Helen Dickinson, CEO of the BRC.
Dickinson added that labour and energy costs continued to push up input prices for many farmers, particularly of cattle, with dairy and beef prices remaining high.
The BRC is warning the new packaging tax set to take effect in October will put further pressure on prices.
“While retailers continue to absorb higher costs as much as possible and deliver value to customers, any further tax rises in the upcoming budget would keep shop prices higher for longer,” Dickinson said.
Mike Watkins, head of retailer and business insight at NIQ, said many shoppers were concerned about their personal finances and were becoming increasingly price-sensitive.
“As a result, retailers are likely to continue offering promotions and deals in the coming weeks to help maintain sales momentum.”
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