Shop inflation eases in March
Figures released by the British Retail Consortium and Nielsen show that overall shop price inflation eased in March as a result of intensive price-cutting by retailers. The rate slowed to 2.4% in March from 2.7% in February.
Food inflation fell to 4.0% in March from 4.5% in February. Non-food inflation slowed marginally to 1.5% from 1.6% in February.
Stephen Robertson, BRC director general, said, "On the day that National Insurance contributions rise, taking another chunk out of many people's disposable incomes, there is some good news here.”
He explained that global commodities are still exerting considerable upward pressure on retailers' costs, but a greater intensity of promotions had led to a fall in year-on-year food inflation. He added that the number of discounted grocery items going through the tills had reached an all-time high of 40% and that “the consistently low rate of inflation for non-food goods shows retailers are still absorbing much of the VAT rise themselves.”
Mike Watkins, Nielsen’s senior manager for retailer services, welcomed the news but said, “It’s too soon to say that the worst is behind us as retail sales have weakened across both food and non-food in recent weeks as shoppers react to falling disposable income. Retailers have had to respond with even more offers and discounts as the cost of living remains one of the top concerns of shoppers."
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