To what extent is inflation impacting retail health and strategy?

– Inflation is a wake-up call for retail: upward commodity prices herald a new retail environment longer term –

– Low/non-existent volume growth environment here to stay and quality, not quantity, will be a key driver for future growth –

Part I: Executive Summary

Introduction

The KPMG/Synovate Retail Think Tank’s (RTT) April meeting followed publication of the latest Consumer Price Index (CPI) for March 2011 by the Office of National Statistics (ONS).  Although the CPI figures showed a surprise fall to 4% in March 2011, compared with 4.4% the previous month, the RTT considers that inflation remains a defining issue for the sector as it tries to drive sales in the current low growth environment.

Despite inflation data from different sources showing disparities (see Appendix for comparison of CPI and BRC-Neilson Shop Price Index) the trend has been upwards, driven predominantly by factors outside retail prices.

“The relatively high rates of inflation pose a number of dilemmas for retailers,” explains Vicky Redwood of Capital Economics.  “High inflation is having a direct and adverse effect on their customers’ incomes, which is leading to a more difficult demand environment. Of course, if pay growth were keeping up with inflation, consumers would not have so much of a problem, but high unemployment is keeping a lid on pay growth.”

Disposable income is also being squeezed by the latest tax and National Insurance changes, as well as the increased fuel prices – both of which follow hard on the heels of the January VAT increase to 20%.  These factors, combined with the threat of interest rate rises, are all impacting overall consumer confidence, putting pressure on spending to be reined in further.

At the same time, retailers’ cost bases are increasing due to higher commodity costs, particularly in the food and fashion sectors, and oil and energy prices, leaving them to consider their pricing strategy at a time when demand is weak: should they increase prices and take the hit to volume or absorb the increased costs and sacrifice margin?

Against this backdrop, this latest RTT white paper examines how retailers are being affected by inflation and how it will influence their future strategy, both now and in the future?

How is inflation affecting the retail sector?

In the past, inflation has come at a time when the health of the sector has been improving.  Neil Saunders of Verdict Consulting said: “The period before the recession saw heavy inflation in terms of rising house prices, which was helpful as it made many consumers feel better off and allowed many to withdraw equity from their homes, some of which flowed into retailers’ tills.  Inflation in the mid-1980s was equally helpful: driven by a surge in consumer demand it allowed retailers to ease up prices and enhance margins without damming their sales.”

The situation we face now is very different.  Both consumers and retailers are being negatively affected as currently inflation is supply based, rather than demand driven.

Price inflation is occurring at the same time as consumers adjust their spending to reflect their new financial realities.  Before the downturn, consumers subsidised their spending through credit or dipping into savings, but this is no longer achievable or sustainable.  As a consequence both margins and sales are under pressure.

From the retailers’ point of view, the global commodity price boom, the weakness of sterling, the rising costs of labour in the Far East and rising farm gate prices have all seen input prices rise on a scale not seen in recent times.  For example, the clothing sector has been affected by cotton prices increasing by more than 140% over the past six months whilst oil prices have risen by about 30% in the first quarter of 2011.

Overall it has a double impact on demand: each pound buys less than it once did at a time when consumers are spending less anyway, meaning retail volumes are now falling regularly into negative territory.

Whilst the RTT acknowledges that retailers have done a good job of keeping their prices down and remaining competitive during the downturn, current inflationary pressures now seem to be having an unavoidable effect on pricing.  Many manufacturers and retailers have been absorbing past cost increases by offsetting them through cost savings elsewhere, supplier support, product redesign or by lowering profit margins, but anecdotal evidence suggests that the ability and willingness to continue to do so is reaching its limits.

Not all retailers are feeling the effects of inflation in the same way though – the picture varies throughout the sector.  John Dawson, emeritus professor of the Universities of Edinburgh and Stirling comments: “Because price inflation affects consumer demand and the cost structure of retailers, price inflation rates vary by sector, channel and format of operation of a retailer.  Retailers’ responses to inflation have to consider the source of it – whether generated from within the UK or whether introduced from outside and the international aspect of inflation has impacts for retailer strategy.”

For example, food retailers and value non-food retailers are affected to a much greater extent due to raw materials comprising a greater proportion of the selling price and volume is more critical.  Tim Denison of Synovate said:  “Non-food retailers at the lower end of the market arguably have little alternative than to bite the bullet and sacrifice margin to avoid alienating their customers and damaging sales volumes.”

What challenges do retailers face in responding to inflation?

Most retailers will never have encountered inflation against this backdrop, being much more familiar with a growth model based on deflationary prices and volume increases.  Retailers therefore have less experience of the relationship between price and volume and of how consumers will respond to price rises.  Selling in this environment requires a very different strategy and skill set.

Mark Teale explains: “The discretionary nature of much shopping activity puts retailers at a significant disadvantage in the price hike stakes when consumers retrench. The more discretionary the nature of the spending, the more difficult it is to sustain real price increases in downturns.”

Retailers are implementing different strategies to manage inflation, with different results.  Recent results announcements highlighted that fashion chain H&M decided not to pass higher costs on to its customers but has seen its profits fall by 30% in quarter one of this year, arguing forcefully that strengthening its price position and protecting its customer base will build its market position and increase market share in the long run, albeit at the expense of short-term shareholder value. In contrast, Next plc has elected to pass its 8% increase in stock prices onto its customers, protecting margin, but at the expense of 1.5% of sales, the company estimates. Tim Denison comments: “Two strong and respected high street retailers with two very different strategies, and perhaps both appropriate for their target markets.”

The RTT points out that there are other methods of handling inflation, such as sharing an element of the burden with their suppliers.  Nick Bubb of Arden Partners said:  “There is no doubt that food retailers are helping consumers ‘dial back’ the impact of price inflation by a bevy of promotions, paid for by suppliers.”

In this price sensitive period, constant monitoring of the supply chain and supply sources is imperative, not only to track cost structures of the suppliers but also to manage the producer and commodity inflation in the economies they are based in.  The proliferation of international sourcing means that producer and commodity price inflation in overseas economies has an increasing impact on price inflation in the UK, and makes matters more complex for British retailers. 

Identifying profitable customers and understanding the constantly-changing behaviour/demand of consumers is an essential attribute for retailers in the currently-changing market.  “From a strategic perspective this makes it  more important  to focus on the fundamentals: attracting customers, drawing them in, putting something relevant in front of them and then persuading them to spend,” said Neil Saunders. “It may sound simple, but it is all too easy to forget that this equation is what retail is really all about.”

How will this affect retail in the future?

There are differing views as to how long the inflationary environment will last, but the RTT believes that global population growth – and in particular, the growth in number of middle income groups in emerging markets – will increase pressure on commodities in the longer term.

Commodity costs in the short term might stop growing as quickly – cotton prices, for example, are set to fall back in 2012 – but it seems unlikely that they will return to the relatively benign price rises of the pre downturn era.  As such, the RTT believes this will mean there will be a fundamental change in the way the market operates.

Helen Dickinson comments: “Over the past twenty years, the price of much of what we buy has fallen in price in relative terms assisted by plentiful supply of commodities, cheap labour and technological advances.  Over the next twenty, the increase in global consumption will be twice that of the last twenty, due to the significant growth rates of the emerging economies, increases in the world’s population and, most significantly, increases in the numbers of middle income groups, all wanting to consume at the rates to which we have become accustomed.”

The RTT believes the inevitable consequence of these changes is low price inflation/deflation in prices will not return and that a structural and psychological change is imminent.  The maturing of the UK retail market means that growth will not be volume driven.  Retailers should be considering and planning now how best to adapt to this change of environment.

Businesses will need to continue to seek greater efficiencies to mitigate the effects of inflation, as well as adopt a more sophisticated approach to risk assessment of producer and commodity price inflation.  If growing middle incomes in the East means there is less of an appetite for working in factories, there will be the need for increased flexibility in sourcing and UK retailers may look to increase their domestic/European supply chain – which some are already beginning to do.

Pricing strategy will, in future, be placed firmly on retail businesses’ board agendas.  Those which analyse and adjust opening price points against sales continuously to match the subtle shifts in mood and behaviour will ultimately be more successful in securing sales and creating the difference between winners and losers.

The current environment also encourages retailers to adopt strategies that emphasise innovations to increase productivity of all their assets.  With a greater need for productivity improvement, merchandising, packaging, promotional, format and IT & logistics innovation all help to offset some of the negative effects of rising inflation.

Conclusion

Whilst in the past some degree of inflation has been a good thing for the retail sector, the current scenario is very different.  It has come at the wrong time and against the wrong economic backdrop to be beneficial, but even more importantly it is supply driven rather than demand led.  If retailers had been trying to increase prices when disposable income wasn’t being squeezed so hard, it might have been a different story and volumes may not have affected to the same extent.

But beyond this short term problem, the RTT believes that inflation represents a wake-up call for retailers: it is highlighting how they need to become better at managing for the longer term future and expects over the next 20 years the sector will have undergone a fundamental structural change in the way individual businesses operate, through their sourcing processes, supply chain management and the way they price products.

The current volume growth model of UK retail can no longer be relied upon to deliver results – growth is more likely to come from adding value to consumers in the future.  Businesses which are bold enough to start taking a long term view now and make appropriate investment for the health of the business in the future are much more likely to emerge as the winners.

Helen Dickinson concludes: “A retail market driven by deflation, increasing volumes and space expansion will become a thing of the past.  Over time there will have to be a fundamental shift in the operating models of retailers as they seek to counter increasing costs caused by increasing scarcity of supply of resources.  Those that innovate their way forward, taking into account the longer term structural changes as well as short term strategies will be the future success stories.”

Part II: In detail – Individual view of the RTT members

Vicky Redwood, Capital Economics: “Retailers face pricing dilemma”

The relatively high rates of inflation pose a number of problems and dilemmas for retailers. Perhaps most obviously, high inflation is having a direct adverse effect on their customers’ incomes, which is therefore leading to a more difficult demand environment for retailers.  Of course, if pay growth were keeping up with inflation, consumers would not have a problem.  However, high unemployment is keeping a lid on pay growth.  So CPI inflation is currently outpacing consumers’ average earnings growth by about 1.5% – i.e. real pay is falling sharply.  Unless consumers can cut their saving, this will directly feed through into lower consumer spending.

But retailers are not innocent bystanders in all this.  The causes of inflation are higher commodity prices, higher import prices and rising VAT. Retailers are therefore having to make a strategic decision about how much of these price rises to pass on to consumers.  This will obviously involve a judgement about how consumers will react to higher prices.  Some retailers (e.g. Next) seem willing to raise prices and take the chance that demand suffers as a result. Other retailers (e.g. Primark) are keener to absorb higher prices into their profit margins in order to keep prices unchanged.

One of the main problems for the retail sector is that it has not been through a period of inflation for over a decade.  As the chart shows, core goods CPI inflation (i.e. goods inflation excluding food and energy) turned positive in 2009 for the first time since 1997.  Retailers therefore have little recent experience of how consumers will respond to price rises.  Indeed, selling in a time of rising prices may turn out to require a very different strategy to selling when prices are continually falling.

Another problem is that it is uncertain for how long the rise in price pressures will be sustained.  If the world is entering a period of several years of strong emerging markets growth, which will put continued upward pressure on commodity and import prices, then retailers will need to consider how they should adapt to this change of environment – e.g. perhaps by devoting greater resources to sourcing cheaper goods from cheaper locations.

Mark Teale, CB Richard Ellis: “Strict cost control remains key business driver”

Demand weakness and competitive pressures alone are unlikely to be sufficient to hold down retail prices in the medium term.  The global commodity price boom has seen input prices rise on a scale not seen in recent times: price increases that will ultimately be passed on to consumers.  The other problem is the continuing weakness of sterling.  Rather than benefiting from the favourable tailwind of an appreciating currency, which would help to bear down on inflationary pressures, the UK now faces a further headwind.

Despite the inflationary environment, the potential for all but the strongest retailers to push through large price increases is still heavily constrained.  Domestic economic conditions are highly unusual. There is little sign yet of any widespread resumption in wage inflation.  Savings rates, for the most part, remain stuck well below RPI levels leaving pensioners and domestic savers generally high-and-dry while the spectre of increasing interest rates hangs over housing markets.  Household incomes are being squeezed from all sides. Not surprisingly consumer confidence remains extremely fragile.

The discretionary nature of much shopping activity puts many retailers and catering/leisure operators at a significant disadvantage in the price hike stakes when consumers retrench. Unavoidable/obligatory household cost increases dilute the potential for price increases elsewhere.  Significant household cost increases are continuing to feed through from government (central and local); transport operators, energy utilities, health/education and financial services markets generally: cost increases that tend to have the first call on household budgets in straitened times.  Incomes are meanwhile being diluted by tax increases with the almost inevitable prospect of further tax increase announcements later in the year and next.

The more discretionary the nature of the retail/leisure spending, the more difficult it is to sustain real price increases in downturns.  Expansion activity is now lifting in retailing markets, particularly in grocery but the resurgence in activity appears to have more to do with stronger players taking advantage of fragile demand levels to make market share gains. This added competition looks set to put further pressure on smaller retailers.  Strategically, strict cost control rather than above inflation price increases consequently looks set to remain the key business driver for many retailers for a significant while to come.

Neil Saunders, Verdict Consulting: “Lack of wage inflation results in sales volume decline”

Inflation is a difficult one to pin down: is it a friend or an arch enemy of retail?  The answer largely depends on the type of inflation and the economic context in which it manifests itself.

The period before the recession saw heavy inflation in terms of house prices.  This was helpful as it made many consumers feel better off and allowed some to withdraw equity from their homes, some of which flowed into retailers’ tills.  Going back a bit further, inflation in the mid part of the 1980s was equally helpful: being driven by a surge in consumer demand it allowed retailers to ease up prices and enhance margins without damming their sales.

Unfortunately, the current bout of inflation is a very different beast and is far from benign.  A key difference is that most of today’s inflation is cost, rather than demand, driven. In essence, this means there is no real margin gain for those retailers putting up prices.  Worse than this, however, is the fact that the inflation seen in consumer prices is not matched by inflation in wages.  This means people very quickly feel poorer and reduce their spending accordingly. It also means each pound spent buys less than it once did.  The upshot is that retail volumes – or to put it crudely the amount of ‘stuff’ people buy – dips into negative territory.

So what are the consequences for retailers?  The most obvious thing is that a negative volume environment is a particularly punishing one.  If fewer things are sold, the proceeds of that spending can’t be spread as widely – and that creates a situation in which some retailers will simply lose sales altogether.  This is one of the reasons why there is an ongoing polarisation between winners and losers in the retail sector.

From a strategic perspective this makes it imperative to focus on the fundamentals: attracting customers, drawing them in, putting something relevant in front of them and then persuading them to spend.  It may sound simple but it is all too easy to forget that this equation is what retail is really all about.  The retailers that do remember – and execute it well – will be the ones that do best.

Helen Dickinson, KPMG: “Increasing volumes a thing of the past”

The extent of inflation is a matter of debate with data from differing sources painting often conflicting pictures, but it is certainly there.  The issue for retailers is that it is supply not demand driven, and hence their ability to pass on its effects is more limited.

It is affecting food retailers and non-food retailers at the value end to a much greater extent, as raw materials comprise a greater proportion of the selling price and volume is more critical. With weak demand and commodity prices rising, retailers have various strategies at their disposal to mitigate inflation’s effect on customers – from shifting supply to cheaper sources, finding efficiencies in the supply chain, attempting to pass back its effect to their suppliers or even taking a short term hit to margins.  Therefore in the immediate term, the impact of inflation is at best neutral, but for the sector as a whole it is negative, and without significant change will continue to be so.

Over the past twenty years, the price of much of what we buy has fallen in price in relative terms assisted by plentiful supply of commodities, cheap labour and technological advances.  Over the next twenty, the increase in global consumption will be twice that of the last twenty, due to the significant growth rates of the emerging economies, increases in the world population and most significantly increases in the numbers of middle income groups, all wanting to consume at the rates to which we have become accustomed.

Thus a retail market driven by deflation, increasing volumes, and space expansion will become a thing of the past.  Over time there will have to be a fundamental shift in the operating models of retailers and they seek to counter increasing costs caused by increasing scarcity of supply of resources.  Those that innovate their way forward, taking into account the longer term structural changes as well as short term strategies will be the future success stories.

In the shorter term, these leading retailers are working on identifying who their most profitable customers are and understanding changing customer buying habits and the impact of price changes on demand patterns – thereby putting pricing strategy firmly on the boardroom agenda – where it will stay for some time to come!

Richard Lowe, Head of Retail & Wholesale, Barclays Corporate: “Rising commodity prices affect supply chain”

We have seen a continuing upward trend in inflation for some time which is impacting retail sales and hence the health of the sector.  Adding to this is the significant amount of inflation we are importing as a result of both commodity prices and rising overseas costs on goods, for example manufacturing costs.

The price of oil (US$ per barrel) which now stands at $109 (April 2011), is certainly one key factor impacting retail strategy and health.  The price in 2010 remained below US$90 until the end of the year and largely traded around US$80 with an increase to over US$100 in March this year.  This is a key commodity price throughout the supply chain and is causing inflationary pressures through to retail.

Rising oil prices have also had a direct impact on the increase in the price of petrol.  We have seen that footfall numbers fell throughout 2010 and this trend is continuing in 2011, with the rising price of petrol no doubt reducing the number of shopping trips being made.  Given this, retailers are looking more at their multi-channel strategy and recognising that if they cannot get the consumer to their stores, they need to service the consumer’s needs from home or whilst they are on the move through mobile technology.

The clothing sector has been buoyed for many years through deflationary pressures, however inflation was finally seen in the second half of 2010 and is continuing.  A key element of this has been the increase in the price of cotton which has risen from a flat US$80 per bale through until Q3 2010, following which it has steadily risen to the current high of US$208 (April 2011).  This unprecedented rise has seen shop clothing prices increase as retailers and suppliers are unable to absorb the cost increases which are therefore being passed onto the consumer.

Given this we are seeing a reduced volume in sales and the key strategy is around the quality and design of product.  We continue to see the consumer mix premium high street pieces with value product, and investment in staff and training ensures that retailers maximise their footfall conversion and average transaction value.

John Dawson, Universities of Edinburgh & Stirling: “Impact of inflation varies across sector, channel and format”

Headline figures of measures of price inflation have little meaning for retailers. Because price inflation affects consumer demand and the cost structure of retailers, price inflation rates vary by sector, channel and format of operation of a retailer.  Retailers’ responses to inflation have to consider the source of the inflation – whether generated from within the UK or whether introduced from outside.  The international aspect of inflation has impacts for retailer strategy.

Increases in international sourcing means that producer and commodity price inflation in non-UK economies has an increasing impact on price inflation in UK. Constant monitoring supply sources is necessary, not only in respect of cost structures of the suppliers but also of the producer and commodity inflation in the economies of the suppliers.  With commodity prices subject to global price rises as with cotton and some food commodities, then these price rises potentially pass through to retail price inflation in UK.  The strategic implication of such inflation is a need by retailers for increased flexibility in sourcing and also a sophisticated approach to risk assessment of producer and commodity price inflation.  Retailers have to take a strategic decision on whether to pass on price rises or reduce margins.

Whether to pass on producer and commodity price inflation to consumers depends on the nature of local competition and on the retailer’s format.  Large international retailers often with several formats are operating in markets that are likely to have different local inflation rates and the retailer is able to pass on the higher input prices to different extents in different markets. This flexibility of the international retailer contrasts with the inflexibility of operating solely in the UK.

The presence of inflation in the retail market encourages retailers towards strategies that emphasise innovations to increase productivity of all their assets. With higher inflation, price competition is stronger so there is greater need for productivity improvement to maintain selling prices.  Inflation generates strategies to increase innovation to improve productivity – with merchandising, packaging and promotional innovations, format innovations, IT and logistics innovation, etc.  Retailer success as inflation increases depends on having constant innovation.

Tim Denison, Synovate: “Pricing strategies key to game plan”

Inflation is one of the most significant influences of retail strategy as we turn into quarter two 2011.  On the back of snow-damaged Christmas campaigns and an unhealthily quiet start to the year, retailers are battling against rising costs and diminishing consumer spending levels.  Should rising costs be passed on to the customer or absorbed to nurse demand?

It is in the non-food sector where the contrasts in strategy and decision-making are most apparent.  They are starkest of all in the clothing sector, where raw material prices (e.g. cotton prices up 140% over the last 6 months) and rising overseas labour costs are responsible for seismic re-evaluations and diverse strategies.  Whilst all fashion retailers are establishing where they can take further costs out of their businesses, how they can source more cost-effectively and how they can transit into cheaper raw materials, the most critical decision rests with how to deal with double-digit inflation.

As a consequence of deciding not to pass higher costs through to its customers, H&M, the Swedish fashion chain, has seen its profits plummet by 30% in quarter one of this year.  It argues forcefully that strengthening its price position and protecting its customer base will build its market position and increase market share in the long run, albeit at the expense of short-term shareholder value.  In contrast, Next plc has elected to pass its 8% increase in stock prices onto its customers, protecting margin, but at the expense of 1.5% of sales, the company estimates.  Two strong and respected high street retailers with two very different strategies to manage inflation, and perhaps both appropriate for their target markets.

As rising living costs continue to buffet the shopper, the spending power of the least affluent in our society is drained the most.  Non-food retailers at the lower end of the market arguably have little alternative than to bite the bullet and sacrifice margin to avoid alienating their customers and damaging sales volumes.  Those in the middle of the market, will generally enjoy lower price elasticity and be less vulnerable, other things being equal.  Furthermore, those retailers with broad appeal spanning both the middle and lower market, are able to adopt a combined strategy: passing through goods inflation at the top end of its ranges and absorbing extra cost at the bottom end.

Pricing strategy will undoubtedly be a focal part of the game plan for many retailers as we progress through 2011.  Getting the sensitive balance right  will help define winners and losers; retailers who analyse and adjust opening price points against sales continuously to match the subtle shifts in mood and behaviour will ultimately be victorious in grinding out sales.

Nick Bubb, Arden Partners: “Food and clothing sectors hit by input price hikes”

In theory, a little bit of price inflation is a good thing for most retailers, as if passed straight through to consumers it should automatically inflate top-line sales growth and make it easier to manage operating cost and margin ratios, other things being equal.  But things do not appear to have been equal in the two big sectors of food and clothing, for example, as these sectors are not benefiting as much as might have been expected from the commodity-related boost to input prices.

With food price inflation at say 3-4%, or more, the big food retailers should be delivering at least 3-4% LFL sales growth on an ex-VAT basis, but in fact they are struggling to deliver any LFL sales growth.  And with clothing price inflation of perhaps 7-8%, on the back of the explosion in cotton prices, the big Clothing retailers should be delivering useful, mid-single digit LFL sales growth on an ex-VAT basis, although they are also struggling to achieve any growth overall.

The poor trading conditions in food and clothing retailing imply that either price inflation has not been reaching the levels expected, because of promotional pressures, or that unit volumes have suffered disproportionately, because of consumer resistance to paying higher prices.

In the case of food retailing, it seems unlikely that sales volume has collapsed as food demand is very inelastic, by and large, notwithstanding the incursion into non-food by the majors, so the issue must be a combination of price promotions and cannibalisation.  There is no doubt that food retailers are helping consumers “dial back” the impact of price inflation by a bevy of promotions, paid for by suppliers, but this has been the case for quite some time now and though the level of promotional intensity is even higher than before Christmas, it has not increased disproportionately.  A more likely explanation of sluggish LFL sales is that the impact of higher food price inflation on underlying top-line growth has been undermined by structural factors, namely the big step-up in new store space growth in the industry in recent months.  A lot of this new space is devoted to non-food, to the detriment of the High Street, but it would appear that the majors have cannibalised themselves in the short term by opening an excessive number of new stores, thus diluting potential LFL food sales growth.

Now, clothing is a far more discretionary spending product than food, and with household budgets under pressure it has always seemed unlikely that consumers would simply swallow the big increases in cotton-related prices, so it is worth looking at what industry leader Next has to say on the subject. In their results presentation on March 24^th Next made the point that it is very hard to track the impact of clothing price because of the lack of comparable products, but that the average price of 20 LFL products bought for Spring/Summer was 14% higher than a year ago.  However, unit volumes on those products had fallen by 15% on average so far, implying a price elasticity of around -1.1 and explaining why sales by value have fallen.  In general Next said that average clothing prices were 8% higher this season (with 8-10% inflation expected in Autumn/Winter), but that the average price of the stock that Next had actually sold was only 6% higher, because customers had traded down within their price and range architecture to lower priced products.

The indications are that cotton and clothing prices should fall back in 2012, so it will be interesting to see if price elasticity works in the other direction and that deflation drives higher unit volumes, but much will depend on how strong consumer spending and confidence is at a time when interest and mortgage rates are likely to be on the rise.  In the meantime, it is clear why one sort of inflation has been bad for retail health in recent months and that is because the surge in petrol prices has been soaking up so much of the disposable income of the typical consumer…

Appendix: Inflation Facts & Figures

Two of the main sources of retail price inflation data are the British Retail Consortium and the ONS.  The charts below highlight the differences in headline CPI versus the BRC-Neilson Shop Price Index and those within the respective indices for food and for clothing.

White Paper No 20-1.pdf

Date Published: 5/1/2011 12:15 PM