Shop price inflation falls to lowest level in over two years

New figures from the British Retail Consortium (BRC) show that shop price annual inflation has fallen to its lowest point since December 2021.

According to the trade association, overall shop inflation in March dropped to 1.3 per cent, down from 2.5 per cent in February.

Non-food inflation decreased to 0.2 per cent from 1.3 per cent in the previous month, the lowest level since January 2022.

Meanwhile, food inflation also decreased from five per cent in February to 3.7 per cent in March – its lowest point since April 2022.

But chief executive of the BRC Helen Dickinson warned that while lower inflation is good news for consumers, retailers are set to face "significant increased cost pressures" in April.

"These costs include a 6.7 per cent business rates rise, ill-thought-out recycling proposals, and new border checks – all at the same time as the largest rise to the National Living Wage on record," she continued. "The industry needs pro-growth government policy that supports investment and helps keep down prices for households up and down the country.”

Mike Watkins, head of retailer and business insight at NielsenIQ, which partners with the BRC on its inflation figures, said that the fall in prices was expected given that a year ago food inflation was 15 per cent.

"But it is also helped by intense competition amongst the supermarkets as they look to drive footfall, with focussed price cuts and promotional offers earlier in the month for Mother’s Day and now again in the weeks leading up to Easter,” he added.

In December, shop price inflation remained flat after food prices dropped for the eight consecutive month.

Shop price annual inflation was unchanged at 4.3 per cent during the month, with shop price growth at its lowest level in June 2022.

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