Business

Consumer squeeze tightens as shop price inflation in Northern Ireland hits 18-year high

Shop prices in Northern Ireland are at 18-year highs after inflation accelerated in January
Shop prices in Northern Ireland are at 18-year highs after inflation accelerated in January Shop prices in Northern Ireland are at 18-year highs after inflation accelerated in January

THE price of everyday staples on the shelves of Northern Ireland stores has hit at 18-year high, a new retail index shows.

And there is little sign of that cost of living squeeze relenting, with a dire warning that the cost peak is yet to arrive.

The latest Shop Price Index from the British Retail Consortium (BRC) and NielsenIQ shows that prices are now 8 per cent higher now than they were last January.

Overall food inflation rose to 13.8 per cent from 13.3 per cent in December - the highest inflation rate in the category on record.

And inflation on fresh food also reached a record high due to increased food production costs, as well as elevated fruit and vegetable prices, accelerating to 15.7 per cent from 15 per cent in December.

Ambient food inflation saw the fastest increase on record as wholesale and bulk prices rose, particularly for sugar and alcohol, accelerating to 11.3 per cent from 11 per cent in December.

However, clothing and footwear prices eased, allowing consumers to replenish their wardrobes during the January sales.

The figures come after a separate report from Kantar said grocery price inflation in the four weeks until January 22 hit a record 16.7 per cent, adding a potential £788 to annual shopping bills.

“People here have had little respite from the cost-of-living squeeze as prices at shop tills spike further,” according to Neil Johnston, director of the Northern Ireland Retail Consortium (NIRC).

“It's too early to say if shop price inflation has crested.

“But what is certain is that household finances are likely to be strained further in the months ahead by energy bills, mortgages rates, possible hikes in domestic rates, and the freeze in income tax thresholds.”

He added: “Retailers are striving to support customers by expanding value ranges, fixing prices of some essential goods, and providing discounts for vulnerable groups.

“However, the sheer weight of costs bearing down on the sector and its supply chain is proving difficult to absorb.”

And while food inflation is putting pressure on household budgets for consumers, Mr Johnston also fears retailers themselves are set for further pain when their rates bills arrive in the coming weeks.

He said: “In England, Scotland and Wales, the respective administrations decided at the end of last year to freeze business rates for the coming year..

“Unfortunately we've no decision here, and indeed there is, unbelievably, talk of a significant rise.

“Such a move would inevitably add to pressure on prices which is the last thing consumers need. We would urge the Secretary of State to freeze business rates.”