BRC figures show that non-food inflation increased to minus 1.9% year-on-year in March, against negative 2.1% in February. This is in line with the three-month average of minus 1.9%.
Food inflation increased to 2.4% year-on-year in March, against growth of 2.1% in February. This is above the three-month average of 2%. Fresh food inflation has started to slow – decreasing to 1.4% year-on-year in March against growth of 1.5% in February. This is above the three-month average of 1.3%.
Helen Dickinson, chief executive of the BRC, said: “Retailers continue to do all they can to protect customers from the cost pressures bearing down on the industry. Prices fell for most non-food categories, which kept year-on-year overall shop prices in deflation, but at a reduced rate compared to February.
“Clothing and footwear was in double-digit deflation as a result of weak consumer demand. Across food, price inflation rose year-on-year, with ambient food seeing the highest increase. For example, alcoholic and non-alcoholic beverages both saw price increases due to changes to duties and the hangover from high global sugar prices.
“With retailers bracing for significant extra costs [that] kick in later this week as a result of the Budget, inflation will likely accelerate in the coming months. Along with new packaging taxes later this year, retailers will be shouldering an additional £7bn in costs. It is crucial that the Employment Rights Bill and business rates reform don’t further inflate costs and increase red tape.”
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Mike Watkins, head of retailer and business insight at NielsenIQ, said: “There is competition on the high street as retailers look to pull in reluctant shoppers with seasonal promotions. However, with upwards pressure on prices, retailers may also need some focused price cuts to help footfall in the run-up to the late Easter.”
