Unexpected item in bagging area

Inflation at 1% is still short of target. But the latest figures from the Office for National Statistics don't capture the October plunge in sterling.

And as we could learn from the Great Day-Long Marmite Crisis, most of those extra import costs can be expected to feed through gradually.

The more sensitive elements of expenditure - petrol, diesel, hotel stays (increasingly driven by online bookings) and fashion (likewise, see below) - are the elements fuelling inflation.

Pulling back the rise in inflation was groceries, with supermarkets still locked in aisle-to-aisle price combat, and air fares.

Airlines are having to work hard to stimulate traffic in the wake of terror threats, while overseas visits have become more expensive to those brandishing British banknotes.

Which way wages?

The inflation surge is expected to rise to around 3% early next year, and prices could rise as far as 5%. If sterling continues to fall, inflation will continue to rise. But if it stays roughly where it is, and wage pressure remains subdued, this could turn into a one-off, one-year loss in earnings power.

But those are big conditions to place on this. With a tight labour market and modest wage growth - about which we'll hear more from the Office for National Statistics on Wednesday morning - inflation could bring more pressure for pay rises, as workers see real earnings eroded by the return of inflation.

Add to that skill shortages. Unless there's a Brexit Brit-training miracle, the move to reduce immigration can only exacerbate them. So wage inflation could become more of a feature, in the medium term.

Tesco's extra

All this has come at a miserable time for retail. The relatively good news is that most of the sums for the Christmas season will already be in place. So raised import costs may not feed through for that crucial period as much as they surely will after.

But the Brexit vote brought a sharp rise in import prices, and that's something they could do without. It is, you might say, an unexpected item in the bagging area.

The supermarkets are still struggling to secure market share among more promiscuous shoppers, pushing down grocery prices by 0.8%, according to the most recent Kantar Worldpanel analysis.

Tesco is back to growth of its market share for the first time in five years, to 28.2%. It seems to be drawing shoppers back to its mega-stores, but also has the convenience store format which Morrisons and Asda badly miss. They continue to lose market share at an alarming rate.

Iceland, the Co-op and Waitrose have been quietly growing their presence, with Iceland doing better than you might expect out of non-frozen goods. Only just over half of its sales are frozen, reports Kantar.

German discounters Aldi and Lidl have been up early to put their towels out on the beachfront of British retail, now jointly having nearly 11% of the market. While their growth remains strong, Jeffries, the stock analyst, notes that the Germans are showing signs of beginning to slow. That much was inevitable, or as predictable as anything can be at the nation's check-out.

Fashion victim

The retail analysts at Kantar have also been at work at the most fickle end of retail - fashion. This week's report, covering the year to September, paints an unusually tough picture.

With four consecutive months of sales decline, it is reckoned that £700m has fallen out of the market, the annual equivalent of one of the biggest 10 fashion chains going out of business.

It hasn't seen anything this bad since the crash of 2009. So what's going wrong?

Kantar's director of consumer insight, Glen Tooke, points to a fall-off in buying frequency, and suggests the novel idea that retailers should give customers what they want, not what retailers think they should experience. Insight, indeed.

"Fashion retailers are still following the same patterns of over-buying and deep discounting and consumers are increasingly reluctant to pay full price," says Tooke.

"Retailers have responded to falling sales by investing less in their lines, when what they need to be doing instead is addressing these problems more proactively.

"Rather than chasing after the same 'micro trends' as every one of their competitors, they need to work on understanding what their customers really want and to fulfil their needs."

The latest ONS statistics, showing that clothing is driving the inflation rise, might suggest that his advice is already being applied at least to reduce the discounting.

Too wet, too cold

With Scotland's retail figures particularly weak (an update from the Scottish Retail Consortium is due on Wednesday), the usual explanation is a) Easter fell at the wrong time b) the weather was too wet c) the weather was too cold and, only very rarely, d) the weather was too mild. (Don't use the word 'hot' - that would be just silly.)

The most recent Scottish Chambers of Commerce survey, published last week, found retail the most unhappy of the five sectors included.

Optimism up for 20% of those surveyed, down for 43%. Revenue in Scotland up for 26%, down for 50%. Cash-flow up for 26%, down for 46%. Expectations of price changes point upwards for 37%, down for 3%.

There are positive figures for online sales growth, 25% to 14%.

And that's the elephant that's not in the retail sales space, but located at a major logistics hub, in a 'fulfilment centre'.

Click-and-Collect

While Amazon gets lots of the blame (or can take the credit) for putting retailers into a tailspin, full-year results for Asos have just been published. It specialises not only in fashion but in the notoriously uber-fickle segment of cladding 20-somethings.

Asos has been accused of going down the low-wage warehouse route taken by Sports Direct - an allegation that it dismisses. No zero hours contracts in Barnsley, it says, while moving towards the real Living Wage.

Otherwise, the Asos numbers tell you a lot about what's happening in retail these days.

And given that sales were up 26% to £1.4bn, with pre-tax, pre-exceptional profit up 37%, it must be getting something right.

By selling online, it can deliver to almost every country in the world. So far, it remains led by its British customers, who account for 4.7 million of the 12 million active customers (those that buy at least once in 12 months).

But it's expanding into next-day delivery across much of Europe, into the US and with both a bridal niche site and Asos Africa.

It boasts an astonishing 85,000 products, across branded and own-brand fashion lines. And it launches 4,000 products in the average week.

Asos puts pressure on the supply chain to reduce time from instant-response design to delivery, which matters a lot for those 20-somethings.

It's also pushing out a wide range of delivery options across Click-and-Collect, including a deal with bigger Boots stores.

Data capture tells us that the average Asos shopper visits eight times a month, totalling 70 minutes of browsing, 66% of that is on mobile. Just over half of orders are placed on mobile devices.

And while moving swiftly to keep up with trends on social media, including Instagram Stories, Facebook Live and Snapchat, Asos publishes a gob-smacking 60,000 pieces of "inspirational fashion and lifestyle content" per month to build awareness and brand engagement.

Enough to make this blogger feel a bit of a plodder.