Shop prices continue to fall in March
Shop prices fell for the eleventh consecutive month in March to record the deepest deflation for eight years.
Figures released by the British Retail Consortium and Nielsen in their monthly shop price index show that shop prices were 1.7% lower in March than a year earlier.
Non-food deflation of 3.2% was the sharpest ever recorded since the BRC began the series in December 2006. Food inflation of 0.8% was also a record low.
The BRC said the fall in prices was due to retailers continuing to offer discounts and promotions in a bid to keep their market share.
BRC director Helen Dickinson said: "It's strong industry wide competition as retailers vie for a share of limited spending capacity that is driving this record breaking run. Retailers have been responding to their customers with keen prices and promotions to maintain market share, and March saw the deepest deflation for eight years and the lowest inflation ever recorded for food.
“With food and drink representing 15% of disposable income for the least affluent third of households, retail's significant contribution to maintaining standards of living is clear.”
However, Dickinson warned that the outlook on commodity prices showed some upwards pressures. She added: “So, while we know retailers will be working hard to sustain these low prices, continued support from Government on other costs such as business rates reform and the recent reliefs for National Insurance Contributions will be key to maintaining this positive trend."
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