Shoppers hit with sharpest price rises in a decade

Furniture salesman showing samples to customersImage source, Getty Images

Shoppers have been hit by the highest price rises in nearly 10 years after shop inflation almost doubled over the past month, data suggests.

Shop price inflation jumped from 0.8% in December to 1.5% in January, the BRC-NielsenIQ price index indicated.

The sharp rise was driven by non-food price increases, which included furniture and flooring in high demand.

Many families have been struggling with a cost of living crisis as fuel prices and energy bills soar.

The latest official figures showed inflation at its highest rate for 30 years.

Non-food inflation rose to 0.9% in January after falling by 0.2% in December, while food inflation accelerated to 2.7% in January, up from 2.4% in December.

Higher costs

Helen Dickinson, chief executive of the British Retail Consortium (BRC), said January saw shop price inflation nearly double, "driven by a sharp rise in non-food inflation".

"In particular, furniture and flooring saw exceptionally high demand leading to increased prices as the rising oil costs made shipping more expensive," she added.

"Food prices continue to rise, especially domestic produce which have been [hit] by poor harvests, labour shortages, and rising global food prices."

Ms Dickinson also said this would directly affect households' cost of living as "it would be impossible to protect consumers from any future rises" in costs.

The BRC and research firm NielsenIQ measured inflation in retailers in the UK in the first week of January, looking at price changes in 500 commonly bought items.

It said that shop price rises were the highest since December 2012.

Global rising energy prices, supply problems and higher shipping costs are hitting retailers, with many costs being passed on to consumers.

Staff shortages are a particular problem in the UK, due to Brexit and the pandemic, and are prompting some employers to raise wages, which can contribute to inflation.

Construction supply firm Timco told BBC Radio 4's Today programme it had seen its raw materials and shipping costs increase over the past 18 months.

The firm said it used to pay about $1,000 (£739) for a shipping container, but was now having to pay "north of $10,000".

Alex Stephens, Timco's finance director, said: "Back then, the cost of shipping as a percentage of an overall product might have been low, a single-digit percent, now I would say it's somewhere between 20% and 50% of the pricing.

"We are currently bringing in containers from the Far East where the shipping cost is pretty much the same as the cost of the materials that we are bringing in," he said.

"To be honest, nothing has gotten any better. If anything, things at the moment are getting worse."

Increasing wholesale costs have also led to predictions that annual food bills could rise by £180 on average, according to consultants Kantar.

It said annual grocery inflation was 3.8% over the past four weeks, up from 3.5% in December.

What is going up in price and why?

Image source, Getty Images
Image caption,
Prices of furniture have been highlighted in official statistics

In the official figures, sofas and the like come under quite a broad category of "furniture and household goods". The ONS points out prices in the sector have been rising steadily since the start of 2021.

That includes furniture, household appliances - including the cost of fitting them, and even garden equipment.

Furniture prices are rising for many of the same reasons as skincare products and food. The cost of raw materials - such as wood in this case - as well as transporting them has gone up.

A settee may be considered a luxury item, and one only bought new after saving up the money. A fridge, on the other hand, is a necessity for every family.

Read what else is going up in price and why, here.

The UK's inflation rate rose to 5.4% in the 12 months to December, the highest rate for 30 years.

However, Jack Monroe, who campaigns on food poverty, has said that the prices of everyday essentials are going up by more than the official inflation rate, hitting the poorest hardest.

The Office for National Statistics agreed that "one inflation rate doesn't fit all" and said it would soon be publishing a wider variety of cost-of-living metrics.

Struggling families are dealing with increases in costs including soaring energy prices after a worldwide squeeze on on gas and energy supplies.

Wholesale gas prices have risen to unprecedented levels. At the end of December, they hit a new record of 450p per therm, which experts think could take average annual gas bills to about £2,000 next year.