Shop price inflation is yet to peak as prices accelerated during March, says new data from the British Retail Consortium (BRC).
According to the latest BRC-Nielsen IQ Shop Price Index, shop price annual inflation accelerated to 8.9% in March, up from 8.4% in February. This is above the 3-month average rate of 8.4%. This brings shop price growth to a fresh high.
Non-Food inflation accelerated to 5.9% in March, up from 5.3% in February. This is above the 3-month average rate of 5.4%. Inflation rose to a fresh high in this category.
Food inflation accelerated to 15.0% in March, up from 14.5% in February. This is above the 3-month average rate of 14.5% and is the highest inflation rate in the food category on record.
Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said: “As Easter approaches, the rising cost of sugar coupled with high manufacturing costs left some customers with a sour taste, as price rises for chocolate, sweets and fizzy drinks increased in March. Fruit and vegetable prices also rose as poor harvests in Europe and North Africa worsened availability, and imports became more expensive due to the weakening pound. Some sweeter deals were available in non-food, as retailers offered discounts on home entertainment goods and electrical appliances.”
“Food price rises will likely ease in the coming months, particularly as we enter the UK growing season, but wider inflation is expected to remain high. Retailers continue to work hard to keep prices, particularly of essentials, as low as possible by expanding value ranges and offering discounts for vulnerable groups. Government must also minimise oncoming regulatory burdens, as these will serve as a drag on investment and will ultimately contribute to higher prices for UK consumers.”
Mike Watkins, Head of Retailer and Business Insight, NielsenIQ, said: “Inflation continues to have an impact on the spending power of shoppers and increased energy bills from April will add more pressure. Since food prices have risen retailers have seen more visits but less basket spend, as shoppers manage their weekly food bills by shopping little and more often and seeking out the lowest prices. And as Easter approaches some high street retailers will also be offering discounts and promotions to encourage customers to spend.”