Shoppers are set to be charged even more for goods this year as retailers continue to raise prices on the back of soaring inflation, which is prompting a fall in sales volumes.
Eight out of 10 non-food retailers are poised to continue raising prices, a Retail Economics survey found, with inflation set to account for a collective £18.2bn hike in prices as the total value of UK sales is forecast to rise 2.6% to £249bn in 2023.
This is expected to result in UK sales volume falling 4.9%, the group added, worse than in Germany, France, Australia and the USA, with the latter the only nation forecast to see volume growth this year.
Following the revelation that grocery price inflation rose a record 16.7% in January, according to researcher Kantar, supermarkets and consumer goods companies have suggested that inflation is likely to continue this year.
Nestle boss Mark Schneider last week said the company plans to keep raising its food prices for consumers this year to offset higher production costs.
Unilever PLC (LSE:ULVR), which makes many major food brands, reported in third-quarter results that underlying price growth a record 12.5%. It will provide a new update on pricing as part of its results tomorrow.
Due to their strong pricing power, large consumer goods giants will keep raising prices to maintain their profitability, Bernstein analyst Bruno Monteyne told Reuters, with "the only thing that can stop this is […] consumers starting to trade down to private-label products at a more rapid pace".
Retail Economics said retailers "must be prepared for a consumer downturn in 2023," as budgets continue to be squeezed.