Inflation robbed shoppers of purchasing power over Christmas
4th January 2023 07:39
by Myron Jobson from interactive investor
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Myron Jobson, senior personal finance analyst at interactive investor, comments on the BRC shop price index.
Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “During the festive season, inflation was as much a part of Britons’ celebrations as the gifts and gatherings.
“Inflation was on the menu last month as the price of food jumped to 13.3%, up from 12.4% in the previous month. Our own research* found that the cost of Christmas dinner had gone up by 19% for vegetarians and 11% for a turkey meal compared to last year, with the cost of Christmas trimmings seeing the largest percentage increases – albeit from lower price points. But the research also suggests that some retailers tried their best to absorb heightened cost pressures arising from higher energy bills, labour shortages as well as rising commodity and global food prices to attract custom at a time when disposable incomes are falling.
“Overall, shop price inflation pulled back marginally to 7.3% in December from 7.4% in November, but remains close to record highs. The slowdown in non-food prices rises as retailers sort to limit excess stock does not mask the fact that rampant inflation has robbed shoppers of purchasing power over the festive period.
“Christmas is typically a time of excess, and many budgets will still be reeling from spending on presents and festive treats. But inflationary pressures haven’t gone away during the festive period. Britons are facing higher energy cost in spring when the energy price cap increases, with average bills set to rise from £2,500 to £3,000, and for some, bumper mortgage costs are set to put additional strain on finances.
“Many household budgets are bursting at the seams, and most of these price rises are inescapable as they impact the cost of everyday essentials. But the headline shop price inflation figure can dramatically differ from your own personal inflation number As the cost of living continues to surge, and we all begin to evaluate our spending habits, you must look at what makes sense for you – not an arbitrary measurement from anyone else.”
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