Shop price inflation slowed to one per cent year-on-year in April, down from 1.2 per cent in March, as retailers increased promotions to drive spending.

According to the latest data from the British Retail Consortium (BRC), the headline figure came in below the three-month average of 1.1 per cent, with both food and non-food categories contributing to the decline.

Non-food prices returned to deflation, falling 0.1 per cent year-on-year in April compared with growth of 0.1 per cent the previous month. The retail organisation said the drop reflects heavier discounting across categories such as clothing, furniture and DIY in an attempt to stimulate demand during the spring period.

Food inflation also eased, dropping to 3.1 per cent from 3.4 per cent in March, below the three-month average of 3.3 per cent. Within this, fresh food inflation saw a more notable slowdown, declining to 3.9 per cent from 4.4 per cent, while ambient food inflation edged up slightly to 2.1 per cent, in line with the recent average.

Helen Dickinson, chief executive of the BRC, said that with weakening consumer confidence, retailers competed harder on price to stimulate more spring spending. While retailers have yet to see the full force of the Middle East conflict feeding into consumer prices, she believes it will not be long before it begins to.

“Retailers already face mounting cost pressures from domestic policies, with an extra £10 billion a year added over the last two years from employment costs, packaging taxes and more,” she continued. “This will be compounded as rising fuel, fertiliser, and commodity prices begin to feed into business costs.

“The government can help moderate shop price inflation by fixing the non-commodity charges which inflate businesses energy bills. This could help mitigate the peak in food inflation, reducing the squeeze on struggling households who will ultimately bear the brunt.”

Speaking at the Retail Technology Show last week, Dickinson said that the need to navigate disruption in the retail industry is “here to stay,” as retailers have had to cope with a variety of challenges over the past decade including Brexit, the energy crisis, rising customer expectations and the pandemic.

Geopolitical tensions in the Middle East are the latest problem for retailers, and Dickinson said she believes this issue will persist for the next six months.

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