Shop prices drop by 2.4% in March

Shop prices have fallen by 2.4 per cent this month, echoing the same rate of decline demonstrated in February.

The figures are below the 12 and six month average price decrease of 1.8 per cent and 2 per cent respectively, according to the latest British Retail Consortium-Nielsen shop price index.

“Retail prices fell again in March as the third consecutive month of lockdown led many non-food retailers, especially clothing, to heavily discount their products,” said Helen Dickinson, chief executive, British Retail Consortium. “Low demand and intense competition online will help thrifty consumers find the bargains they are looking for.”

Dickinson revealed that prices of fashion and footwear have seen double digit declines in 11 of the past 12 months, which she said could be attributed to those worst hit “working hard to tempt consumer spending.”

“While food prices inched up slightly compared to last year, they remain significantly below long-term averages, as grocers fiercely protect their market shares,” said Dickinson. “Unfortunately, many retailers may not be able to sustain these low prices in the coming months.

She added: “Rising global food prices, at their highest since 2014, as well as increased oil prices and shipping costs, and Brexit red tape will likely begin to filter through, pushing up prices at tills. Government must ensure that new checks and documentation requirements this autumn avoid introducing significant friction on the import of goods, otherwise British consumers will end up paying the price.”

Mike Watkins, head of retailer and business insight at Nielsen, agreed that with consumer spend limited by pandemic restrictions, non-food retailers have been keeping any supply side driven price increases to a minimum and in some cases have been “reducing prices, to encourage shoppers to maintain spending in the run up to Easter.”

“Whilst food retailers have seen top line sales grow at around 9 per cent since the start of the year, we are now lapping the extreme comparatives of March last year and shop price inflation in food still remains very low and less than CPI,” he explained.

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