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UK food inflation climbs higher

Latest figures from the BRC-Nielsen shop price index have shown that overall shop price inflation increased to 1.5% in March from 1.2% in February.

GENERAL MERCHANDISE

UK food inflation climbs higher

Food inflation rose to 5.4% in the month from 4.2% in February as high energy costs and the threat of drought put upward pressure on prices. However, non-food reported deflation of 0.9% from 0.7% in February as retailers offered discounts on electrical goods, clothing and footwear.

Stephen Robertson, British Retail Consortium director general, said: "Weak demand for many goods means retailers continue to battle hard for consumer spending by keeping prices down wherever possible. Non-food prices fell at their fastest for 28 months. Electrical goods and clothing and footwear experienced the biggest price falls driven by widespread promotions.

"The cost of oil has shot up 11% since the start of the year and that's driven up transport and manufacturing costs, increasing food inflation."

The BRC also pointed out that retailers were increasingly shifting away from multi-buy reductions on specific items in favour of money-off coupons for an entire shop, which do not show up in the index.

Mike Watkins, senior manager, retailer services, Nielsen said: "Consumers are having to cope with falling disposable incomes with fuel and household energy costs also increasing since the start of the year.

"With inflationary pressure continuing in the food supply chain we can expect supermarkets to keep a strong focus on promotional activity over the next few months. Shoppers are following the deals and will continue to seek out the best value for money."

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