Retailers are being encouraged to be innovative to prevent shoppers turning to cheaper stores in response to growing inflation rates. 

The latest rise to 2.3% will give further power to discounters and the ‘Big Four’ to undercut the convenience sector.

“The rise of inflation is expected to continue and, as consumers begin to cut back on their spending, a convenience store could pay the price, with many unable to compete,” said Jacyn Heavens, CEO of software provider Epos Now, which conducted a pricing study of 500 convenience stores.

“It is important convenience stores do everything they can to closely monitor margins to ensure they retain custom and profits, and have an innovative mindset.”

Retailers told Retail Express they were feeling the effects of price hikes. “Food prices are really starting to go up now, across the board. Not a day goes by without something going up in price,” said Peter Lamb of Lambs Larder near Tunbridge Wells, Kent.

“The pound has dropped more than 20% since Brexit. With Article 50 triggered, we’ll see the pound dropping even further and a few months down the line prices will go up even more. Some marginal businesses will go to the wall.”

Dave Hiscutt of Londis in Weymouth, Dorset, added: “Everything is becoming a little bit more expensive. Things like new pack sizes for tobacco and cigarettes don’t help as that’s increased the price too.”