A very happy new year to all of you from NTI.
We start the year with news that UK grocery inflation has stuck at 4.3%, despite the lower food prices reported recently. This is largely due to a rise on non-food items offsetting the reduced food prices.
Retailers have warned that new border checks on goods from the EU entering the UK, which are due to start in April, could push up prices further.
Some animal products, plants and plant products from the EU will require health certificates, followed by physical inspections at the UK border from the end of April.
Helen Dickinson, the chief executive of the British Retail Consortium trade body has said that “Government should think twice before imposing new costs on retail businesses that would not only hold back vital investment in local communities, but also push up prices for struggling households.”
Food price inflation reduced to 6.7% in December 2023, the lowest level since June 2022. This was helped by falls in the prices of wine, port and sherry before Christmas. Non-food products had risen to 3.1% in December from 2.5% in November.
Barclays have reported that hard-pressed consumers have been cutting back on buying new clothes to prioritise spending on entertainment, travel and trips to the pub.
Meanwhile Aldi and Lidl have reported record Christmas trading amid the cost of living crisis.
Lidl reported an increase of sales of 12% compared to 2022’s festive period. Aldi’s sales topped £1.5bn for the first time in the four weeks to 24 December, which was an 8% increase compared to the same period in 2022.
2.5m customers shopped at Aldi on Friday December 2022 alone, and 4.5m more customers passed Lidl’s doors in December. A fresh British turkey was allegedly sold every two seconds in the run-up to Christmas.