Shop price deflation accelerates in March to deepest level since February 2017
Shop price deflation deepened to 1% in March to reach its lowest level since February 2017 according to new figures.
Data from the British Retail Consortium and Nielsen reveals that non-food prices eased in March, with prices falling at a rate of 1.9% from a decline of 2.2% in February.
Meanwhile, food inflation saw a significant slowdown with inflation standing at 0.4%, down from 1.6% in February.
Helen Dickinson BRC chief executive, said: “Shop price deflation accelerated in March, driven by a substantial slowdown in food inflation, which reached its lowest rate for a year. As the impact of the pound’s depreciation one year on are beginning to fizzle out, retailers are passing the positive impact through to the shop floor.
“So, some welcome respite for consumers, particularly with the gap between inflation and wage growth finally narrowing. But with further wage increases on the horizon putting upward pressure on prices, consumers will continue to feel the grip on their spending power.”
Fresh food inflation slowed to the lowest rate since March 2017 with prices edging up 0.3% on the same month last year.
Ambient food prices increased by 0.6% in March year-on-year.
Mike Watkins, head of retailer and business insight at Nielsen, said: "Consumers are still coping with falling disposable incomes and non-food retailers are having to keep price increases to a minimum or make further price cuts, as consumer demand has been weak since the start of the year.
“With inflationary pressure receding in the food supply chain, we can now expect supermarkets to focus on lowering prices and to use promotions to drive visits as part of the battle for gaining share of wallet.”
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