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PwC comments on June 2022 CPI figures - consumer, retail & leisure

20 Jul 2022

Commenting on the Office of National Statistics consumer price index July 2022: 

Lisa Hooker, Industry Leader for Consumer Markets at PwC, said:

"While energy prices - both household utilities and petrol - continued to be the biggest contributors to the increase in inflation in June, food, hospitality and leisure were the only other areas to see big increases compared with May, with almost all other categories unchanged or slightly declining.

"With input price pressure due to commodity price increases and labour shortages, it’s no surprise that supermarkets have had to start to pass on price increases to shoppers. We’ve already seen more shoppers trading down to own label, and manufacturers adjusting pack sizes - so called ‘shrinkflation’ - to try and help customers manage increasing grocery bills.

"Following prior year disappointment and cancellations, we also saw from our consumer sentiment survey that demand for holidays has remained strong. Food and fuel inflation, staff shortages and pent-up demand resulted in hotel and restaurant prices being a big contributor to inflation. 

"Looking ahead, there is no sign that the grocery price increases will abate for the rest of the year. Combined with the anticipated energy price cap increase in Autumn and falling consumer confidence more generally, there’s likely to be a squeeze in discretionary spending. It’s already started as we can see from retailer profit warnings. 

"Without a significant easing of the inflation burden in the autumn, it’s looking like it will be a difficult Golden Quarter for retailers."

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