Food price inflation hits new high
The BRC-Nielsen Shop Price Index (SPI) for November shows that prices were 1.1% higher than at the same time a year ago.
This keeps shop price inflation at its highest rate so far this year, caused by the continued inflationary cost pressures in food filtering through to overall prices, which showed the largest year-on-year increase since December 2006, rising by 4.3%, up from 3.7% in October.
In November, non-food prices remained lower than a year ago, with the rate of deflation accelerating to -0.4% from -0.2% in October. The majority of deflation in non-food continues to come from clothing and footwear, electricals and health and beauty.
Shop prices rose 0.5% between October and November, the same month-on-month change as in October. The main upward pressure came from food, which although easing from 1.4% in October to 0.7% in November, still outweighed the marginal rise of 0.3% seen in non-food.
Despite food inflation accelerating to a new high, deflation in non-food is continuing to keep overall shop price inflation down and well below the CPI, currently at 2.1%. Although food price inflation is likely to remain high in the coming months, it is likely to be outweighed by a period of sustained and substantial discounting in non-food as retailers discount in the run up to Christmas and well into the first quarter of 2008 to combat the inevitable slowdown in consumer spending.
