The British Retail Consortium produces unbiased research and analysis on retail performance and the economic drivers influencing the British retail industry. The MIA’s Membership with the BRC gives us access to an expanded portfolio of content to share with our members. We’re pleased to share the headline statistics from these reports on inflation and footfall.
Global Price Shocks Drive Inflation Higher
Shop Price annual inflation accelerated to 2.1% in March, up from 1.8% in February. This is above the 12- and 6-month average price increases of 0.1% and 1.1%, respectively. This marks the highest rate of inflation since September 2011..
Headline Statistics:
- Non-Food inflation accelerated to 1.5% in March, up from 1.3% in February. This is above the 12- and 6-month average price decrease of 0.4% and increase of 0.4%, respectively. This marks the highest rate of inflation since February 2011.
- Food inflation accelerated to 3.3% in March, up from 2.7% in February. This is above the 12- and 6-month average price growth rates of 1.0% and 2.2%, respectively. This is the highest inflation rate since March 2013.
- Fresh Food inflation accelerated in March to 3.5%, up from 3.3% in February. This is above the 12- and 6-month average price growth rates of 0.8% and 2.4%, respectively. This is the highest inflation rate since March 2013.
- Ambient Food inflation accelerated to 3.0% in March, up from 2.0% in February. This is above the 12- and 6-month average price increases of 1.2% and 1.8%, respectively. This is the highest rate of increase since April 2019.
Commentary:
Helen Dickinson OBE, Chief Executive, British Retail Consortium:
Consumers were hit once again by rising prices, with March seeing the fifth consecutive month of inflation. There have been mounting cost pressures throughout the supply chain for some time, including rising wages, input costs, global commodity prices, energy, and transport. Many of these costs are beginning to be exacerbated by the situation in Ukraine, but the full impact on prices is yet to be seen. Wheat prices have risen sharply, while the rise in oil prices has not only impacted domestic energy costs, but also the costs of fertiliser and transporting goods”
Our Shop Price Index has been rising more modestly than other inflation measures as retailers were able to limit price rises on many essential goods. By keeping the prices of key items down and expanding value ranges, retailers are trying to support customers most affected by the cost-of-living squeeze, many of whom will face higher energy prices and National Insurance Contributions from 1 April. With overall inflation likely to rise even higher according to the Bank of England, consumers will not have an easy ride this year. The war in Ukraine, and volatility in commodity markets is likely to further dampen consumer confidence in the coming months
Mike Watkins, Head of Retailer and Business Insight, NielsenIQ:
With cost-of-living increases accelerating, the next few months will be a difficult time for consumers. Rising food prices will start to impact what’s put in the shopping basket so supermarkets will need to adapt ranges to help shoppers manage what they spend on their weekly groceries. Whilst high street retailers will be competing for discretionary spend that’s coming under increasing pressure.Gradual improvement to UK footfall
The UK’s retail Footfall levels took a step in the right direction in March, showing an improvement from the previous month’s slowdown and representing the highest recovery point since October 2021.
Commentary
Helen Dickinson OBE | Chief Executive | British Retail Consortium
March saw another gradual improvement to footfall levels across the UK. As the first full month without coronavirus restrictions in England and Northern Ireland, consumers were able to shop with a greater sense of normality, spurred on by some spring sunshine. While all UK shopping locations enjoyed higher footfall levels than earlier in the pandemic, shopping centres saw a significant improvement for the first time in 2022, as shoppers browsed multiple stores in preparation for the summer season”
“There are many challenges on the horizon as consumer confidence fell to its lowest levels in 16 months. Consumers are now feeling the effects of rising living costs, increased food and fuel prices, and are also anticipating higher energy prices from 1 April. The impact on retail footfall and retail sales across both stores and online is yet to be seen, but as belts continue to tighten and prices continue to rise, it will be a difficult road ahead for consumers.”
Andy Sumpter | Retail Consultant – EMEA | Sensormatic SolutionsAs we surpass two years since the first Covid-19 lockdown, we might begin to see where retail footfall trends will settle down as retail resets. With the High Street’s recovery hitting its best performance since October and UK shopper traffic tracking ahead of its European counterparts, retailers’ optimism will be met with a healthy dose of realism. “
