Shop price inflation was subdued in March, increasing to 1.2% YoY, against growth of 1.1% in February, according to the latest BRC-NIQ Shop Price Monitor.
Non-food inflation increased to 0.1%, against a decline of -0.1% in February, in line with the 3-month average of 0.1%.
However, storm clouds loom, says BRC chief executive Helen Dickinson: “Shop price inflation edged up in March, despite food inflation easing as dairy prices fell with lower wholesale milk costs. Retailers offered promotions on alcohol, TVs and sound systems in the run up to final Six Nations weekend, as well as on clothing and footwear to entice consumers to spend.
“Higher costs resulting from the conflict in the Middle East are starting to feed into supply chains. While retailers will work with their suppliers to mitigate the impact on prices as far as possible, inflation will rise, although there are no indications it will reach the peaks of the last spike in April 2023. Government needs to look at all the costs that could exacerbate these price rises, from new healthy food rules to trade changes with Europe, the Employment Rights Act and non-commodity charges which make up such a large proportion of energy bills. Ignoring businesses’ concerns risks even higher prices for shoppers.”
Mike Watkins, head of retailer and business insight, NIQ, adds: “Whilst it’s good news that food inflation slowed in recent weeks, shoppers are increasingly conscious of the amount of money they are spending at the checkout, and non-food retailers will be hoping for a good Easter to drive sales. However, if price rises come through the supply chain over the next few months, this has the potential to take the edge off retail growth.”
