Help ease the burden on retail – or prices will rocket, bosses warn Labour
Labour has been urged to ease the burden on retailers as figures show that stores are struggling to keep price rises at bay.
Shop price inflation crept up to 1.2 per cent in May, from 1 per cent in April, according to data from trade association the British Retail Consortium (BRC).
The BRC warned that this could worsen unless the Government takes action to address the cost pressures being piled onto the sector.
The increase in inflation was driven by prices of non-food items, with furniture and beauty products seeing the most dramatic rises as war in the Middle East pushed up raw material and shipping costs.
Inflation of non-food goods increased to 0.5 per cent year on year in May, compared to a drop of 0.1 per cent in April.
Meanwhile, food price inflation fell to 2.7 per cent, from 3.1 per cent in April.
Costs crunch: Shop price inflation crept up to 1.2% in May, from 1% in April, according to data from the British Retail Consortium
That is likely to be presented by retailers as evidence that they are already doing their best to protect customers from high costs.
It comes days after plans floated by Labour to force stores to cap the price of essential goods were widely criticised.
Marks & Spencer chief executive Stuart Machin said the idea was ‘completely preposterous’ while Bank of England governor Andrew Bailey said price caps were not sustainable in the long run.
BRC chief Helen Dickinson said: ‘While retailers work hard to keep prices down for customers, they continue to face significant cost pressures, including higher energy bills and disruption linked to the conflict in Iran.
Businesses cannot absorb these costs indefinitely, which risks pushing prices higher in the months ahead.’
Retailers have complained that they are battling to keep prices down despite coming under pressure from government hikes to minimum wage rates and employer National Insurance contributions.
Dickinson called on Labour to ‘take action’ to fend off the pressure by slashing costs for businesses, including reducing Government levies on energy bills.
Businesses are unhappy with so-called ‘non-commodity costs’, which are green energy levies added to the price of energy, the BRC said.
Dickinson added: ‘Cutting the non-commodity charges, taxes and levies that make up more than two-thirds of energy bills, and reducing red tape would help keep inflation down.’
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