Latest figures from the BRC – Nielsen Shop Price Index show that food inflation accelerated to 1% in March, the sharpest rise since February 2014.
The year-on-year figure compares to a rise of just 0.4% in February and a 0.8% fall in January. Fresh food saw inflation of 0.9% in March, up from 0.1% in February, whilst ambient inflation accelerated to 1.3%, up from the 0.8% rise in February.
Helen Dickinson, Chief Executive of the British Retail Consortium, said that whilst food shop prices are creeping up, continuing intense competition between the supermarkets is helping keep inflation in check. “The limited increase is even more impressive, given the magnitude of the devaluation in sterling,” she said.
Separate figures released yesterday by Kantar Worldpanel showed the price of everyday grocery goods was up by 2.3% compared to this time last year – an acceleration from the 1.4% figure recorded the previous month. It said rising prices in categories such as butter, fish, tea and skincare were partially offset by falling prices in categories including crisps, bacon, chocolate and fresh poultry.
Meanwhile, the BRC – Nielsen data showed that overall shop prices fell by 0.8% in March, driven by deflation on non-food items of 2%. Heavy discounting pushed prices of clothing and footwear down 5.9%, whilst the cost of furniture and floorcovering fell 2.6%.
Mike Watkins, Head Of Retailer And Business Insight at Nielsen, commented: “Inflation is gaining momentum across the economy but in food retailing, the cost price increases being passed onto shoppers in March was lower than the Consumer Price Index and in the Non-Food channel there is still deflation. We anticipate this trend to continue over the next few months. If so, this would be good news for shoppers managing household budgets when prices are rising faster elsewhere and with Easter falling later this year, it may help overall retail sales growths.”