The MIA’s Membership with the British Retail Consortium gives us access to an expanded portfolio of unbiased research and analysis to share with our members. Today, we’re providing key macroeconomic data from the UK economy, including inflation figures, footfall levels and sales growth.
Inflation: Shop prices yet to peak…
Headline Statistics:
- Shop Price annual inflation accelerated to 7.4% in November, up from 6.6% in October. This is above the 3-month average rate of 6.5%. This marks another record for shop price inflation since this index started in 2005.
- Food inflation accelerated strongly to 12.4% in November, up from 11.6% in October. This is above the 3-month average rate of 11.5%. This is the highest inflation rate in the food category on record.
- Non-Food inflation accelerated to 4.8% in November, up from 4.1% in October. This is above the 3-month average rate of 4.0%. Inflation remains rose to a fresh series’ high in this category.
- Fresh Food inflation strongly accelerated in November to 14.3%, up from 13.3% in October. This is above the 3-month average rate of 13.1%. This is the highest inflation rate in the fresh food category on record.
- Ambient Food inflation accelerated to 10.0% in November, up from 9.4% in October. This is above the 3-month average rate of 9.2%. This is the fastest rate of increase in the ambient food category on record.
Commentary:
Helen Dickinson OBE, BRC Chief Executive, said:
“Winter looks increasingly bleak as pressures on prices continue unabated. Food prices have continued to soar, especially for meat, eggs and dairy, which have been hit by rocketing energy costs, and rising costs of animal feed and transport. Coffee prices also shot up on last month as high input costs filtered through to price tags. Christmas gifting is also set to become more expensive than in previous years, with sports and recreation equipment seeing particularly high increases.”
“While there are signs that cost pressures, and price rises, might start to ease in 2023, Christmas cheer will be dampened this year as households cut back on seasonal spending in order to prioritise the essentials. Retailers continue to do all they can to support their customers and ensure everyone can enjoy the festive season by fixing prices of many essentials, offering discounts to vulnerable groups, raising pay for their own people, and expanding their value ranges.”
Footfall stumbles ahead of Christmas
Key findings include:
- Total UK footfall decreased by 13.3% in November (Yo3Y), 1.5 percentage points worse than October. This is worse than the 3-month average decline of 11.5%.
- High Streets footfall declined by 13.6% in November (Yo3Y), 2.0 percentage points worse than last month’s rate and worse than the 3-month average decline of 12.3%.
- Retail Parks saw footfall decrease by 4.2% (Yo3Y), 0.5 percentage points worse than last month’s rate and worse than the 3-month average decline of 2.7%.
- Shopping Centre footfall declined by 23.2% (Yo3Y), 1.4 percentage points worse than last month’s rate and below the 3-month average decline of 22.6%.
Helen Dickinson OBE, BRC Chief Executive, said:
“Footfall took another stumble as the cost of living crisis put off some consumers from visiting the shops in November. Others opted to stay home due to the scattering of rail strikes, or chose the World Cup over shopping visits. Many big cities were particularly hard hit, with Birmingham, Bristol and Manchester all seeing the biggest drops in footfall since January.”
“Rising inflation and low consumer confidence continue to dampen spending expectations in the run up to Christmas. Despite retailers doing their best to keep prices as low as possible for their customers, financial concerns are trumping spending for many households. But, with three more weeks to Christmas, retailers hope that the festive spirit may still give a welcome boost to both footfall and retail sales.”
Economic Briefing: Real incomes set to fall sharply
Key Data:
- GDP contracted by 0.6% in September, following upwardly revised growth of -0.1% (from -0.3%) in August. A one-off bank holiday for the state funeral of Elizabeth II contributed to at least half of the decline. The service sector was, however, the principal driver of the fall in economic activity, led by declines in information and communication as well as wholesale and retail trade.
- Inflation rose to its highest since 1981 with the Consumer Price Index rising to 11.1%, the peak as projected by the Bank of England. Of the headline rate, 4.9% emanates from housing, energy and transport costs.
- In October, BRC-KPMG’s retail sales grew by 1.6% year-on-year, following September’s expansion in sales of 2.2%.
- The UK economic inactivity rate was estimated at 21.6%, 0.2 percentage points higher than the previous quarter, and 1.4 percentage points higher than before the coronavirus pandemic.
“Expectations of peak interest rates have now almost returned to levels prior to the ill-fated ‘Mini-Budget’ in September. A new fiscal plan, announced by the Chancellor of the Exchequer, appears to have reaffirmed the UK’s perceived credibility in financial markets. However, the plan comprises what amounts to numerous stealth taxes and more broadly tightening government spending set to kick in as the UK’s economy finds itself in the middle of a recession. The extension of energy bill support in time for the April 2023 bill rise mitigates the inflationary pain felt, however, households can expect to experience elevated rates of inflation well into 2023 (~5% on average).”
– Harvir Dhillon, Economist at the British Retail Consortium
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