Shop price inflation up in March
Written by Peter Walker
Shop price inflation increased to 0.9 per cent in March, up from 0.7 per cent in February – the highest inflation rate since March 2013.
The latest British Retail Consortium (BRC) and Neilsen figures showed that food inflation accelerated to 2.5 per cent, up from 1.6 per cent in February – the highest rate November 2013.
Fresh food inflation accelerated to 1.9 per cent in, up from 1.7 per cent in February, while ambient food inflation prices rose by 3.4 per cent, up from 1.5 per cent in February.
Within the non-food category, technological developments within the clothing and electrical sectors meant that prices for these goods have been on a downward trend for the past several years.
However, price decreases in these sectors were offset by increases in DIY, health and beauty, books and furniture prices, according to the report.
In these sectors, cost pressures built up in the supply chain, either from high oil prices last year, delayed impact of the depreciation, or regulatory changes - such as minimum wage increases or automatic pension enrolment - are now being filtered through into final consumer prices.
BRC chief executive Helen Dickinson explained that March saw shop price inflation rise to its highest level in six years, driven primarily by a sharp spike in non-perishable food inflation.
“Increases in global commodity prices and adverse weather events put upward pressures on the wholesale prices of many foodstuffs which, coupled with rises in the cost of alcoholic and non-alcoholic beverages, pushed food inflation from 1.6 per cent in February to 2.5 per cent in March.
“Nonetheless, the bigger threat to food inflation remains the risks of a chaotic no deal Brexit, which would lead to higher prices and less choice on the shelves,” she added.
Mike Watkins, head of retailer and business insight at Nielsen, commented: "The upwards pressure on pricing continues across food retailing and a key driver this month was inflation in ambient food and drink.
“With shoppers looking to stretch their budget for the weekly grocery shop this will not help volume growth, which has been slowing since the start of the year,” he continued, adding: “For many high street fashion, home and outdoor retailers prices are not increasing, so good news for shoppers as the end of season ranges sell through."