Shop prices fell by 0.8 per cent in March, compared to a 0.6 per cent decrease in February, according to the latest British Retail Consortium (BRC) and Nielsen figures.

Non-food prices fell at a steady pace of 1.9 per cent in March – which remains the highest rate of decline in non-food prices since May 2018.

Food inflation eased to 1.1 per cent in March, down from 1.6 per cent in February, while fresh food inflation eased for the third consecutive month, up by 0.4 per cent compared to a 0.6 per cent rise in February – the lowest inflation rate for the category since March 2018.

Finally, ambient food inflation slowed sharply to two per cent in March ,down from three per cent in February.

BRC chief executive Helen Dickinson said that there are a number of price pressures arising from the Coronavirus crisis.

“Food prices, particularly of fresh produce, may be impacted by higher costs on seasonal farm labour, while non-food prices will be pushed down by lower demand,” she stated. “It is likely that the combination of future economic uncertainty and job losses, whether realised or potential, will drive people to reconsider their spending patterns and to save more.”

Mike Watkins, head of retailer insight at Nielsen, added: “The weak demand for many goods and services means non-food retailers continued to battle hard for consumer spending by keeping prices down wherever possible.

“And across supermarkets, the recent upwards pressure on food prices slowed a little in March, with a slowdown in the rate of inflation in both ambient and fresh foods.”

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