The news from the Office for National Statistics this week that the latest consumer price inflation figures showed headline numbers have risen to 3.5% while food inflation held steady at 1.3%, has prompted reaction from two leading retail trade bodies.
Responding to the figures, Harvir Dhillon, lead economist at the British Retail Consortium, said: “With Christmas around the corner, consumers will be understandably concerned by the third increase in inflation in three months.
“However, intense competition between supermarkets has helped hold inflation steady for consumers despite a multitude of supply chain shocks this year. This stability was anchored by drops in the price of butter, coffee and potatoes, helping to ease the pressure on consumers.
Cost of living
“Retailers and the Government are aligned on the need to tackle the high cost of living, and next week’s Budget provides a crucial opportunity to do just that.
“If the Government can cut the cost of doing business, retailers will be in a better position to hold back price rises and increase investment in stores and jobs.
”However, [the new] figures, which determine April 2027’s business rates uplift, mean retailers are on the line for around £250m in additional bills unless action is taken.
“The chancellor must cut the costs on businesses and it will be families who ultimately benefit.”
“Now is not the time to pile on millions in extra costs, and if the Chancellor is serious about reducing the cost of living, he must freeze rates for the year ahead. Cut the costs on businesses and it will be families who ultimately benefit.”
Cold comfort
Also reacting today, James Walton, chief economist at the Institute of Grocery Distribution, added: “Whilst food price inflation has stayed at 1.3%it’s hard to take much comfort as cost pressures continue to build across the food supply chain.
“Retailers are likely offsetting rising costs from geopolitical, regulatory and climate impacts to protect prices for shoppers, particularly ahead of the critical Christmas sales period.
“These cost pressures are placing immense strain on businesses and squeezing margins throughout the supply chain. It’s hard to see how this can be maintained longer term, and our data shows that 79% of shoppers expect food prices to rise next year.
“The industry will be looking to the Budget to see how far the chancellor can support businesses…”
“Ultimately, a more resilient food system, with greater domestic capacity, is key to supporting price stability. The industry will be looking to the Budget to see how far the chancellor can support businesses and shoppers against a challenging financial outlook.”
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