UK Shop Prices Fall at the Fastest Rate Since 2021, Despite Rising Fresh Food Costs
Shop Prices Drop in September
UK Shop Prices are dropping at the fastest pace seen since 2021. Overall, shop prices fell by 0.6% in September, compared to a smaller drop of 0.3% in August, according to the British Retail Consortium (BRC). This decline is primarily driven by lower demand for non-food products, such as clothing and furniture, as shoppers are cutting back due to rising household costs.
Why Are Prices Falling?
Several factors have contributed to this price drop. Retailers face unseasonal weather, which has lowered consumer demand for certain products. In addition, high energy and grocery costs have made many households tighten their budgets. As a result, shops are offering bigger discounts to attract buyers.
Fresh Food Prices Still Rising
While overall prices are dropping, fresh food inflation increased to 1.5% in September from 1% in August. Wet weather in the UK has impacted the production of salads and soft fruits. Additionally, storms in the Atlantic delayed the import of exotic fruits, raising their prices.
Olive Oil Prices Surge
A significant factor in the rise of fresh food prices is the steep increase in olive oil costs. According to the Office for National Statistics, Olive oil is now more than £9.12 per liter, a 42% rise from last year. Due to climate challenges, global olive oil production is at its lowest level in over a decade.
Global Shortage of Olive Oil
Countries like Greece, Morocco, and Turkey have seen lower olive production due to the trees’ natural cycle. However, extreme heat, drought, and diseases severely impact the harvest in major producers like Spain and Italy. These challenges, primarily driven by climate change, are making olive oil more expensive worldwide.
Packaged Food Prices Remain High
In addition to fresh food, packaged food prices increased, with a 3.3% rise in September. The cost of essential ingredients like cocoa and sugar has increased significantly, contributing to the ongoing rise in prices for packaged goods.
Retailers Offering Discounts to Attract Shoppers
Helen Dickinson, chief executive of the BRC, highlighted that September was a good month for bargain hunters. Many retailers offered large discounts to bring shoppers back into stores.
“Shop price inflation is now at its lowest level in more than three years,” Dickinson said. “We’ve seen prices drop in seven of the last nine months, with the biggest reductions in non-food items like furniture and clothing.”
Potential Challenges Ahead
Despite the recent price drop, Dickinson warned that several factors could cause prices to rise again. Geopolitical tensions, climate change, and government-imposed regulations are all potential risks that could reverse the trend of falling prices.
Call for Government Action
Dickinson also urged the government to reduce business rates for physical stores in the upcoming budget on 30 October. She emphasized that retailers face a heavy tax burden compared to other industries, which could have long-term consequences for UK businesses.
Read more:
- Easy Tips for Cutting Energy Costs This Winter
- UK’s Biggest Steel Factory Closes After 100 Years | Job Losses & Future Plans
- $6000 Payment for Seniors in 2024? Find Out the Truth, Eligibility & Payment Details
- Keir Starmer’s Meeting with Donald Trump to Strengthen UK-US Ties
- Key Updates on Prince Harry’s Visa and Tribute to Princess Diana
- UK Economy to Grow Faster Than Japan, Italy, and Germany This Year
- UK Petrol and Diesel Prices Drop Fastest This Year – Save £4 Per Fill-Up
- UK Debt Reaches 100% of GDP for First Time Since 1960s, Causing Major Financial Concerns
- UK Consumer Confidence Drops as Budget Worries Grow
