Increased food prices offset a fall in non-food prices to push overall shop price inflation up to 2.5 per cent in April, new research published today suggests.
The latest pricing index from the British Retail Consortium (BRC) and Nielsen shows a marginal increase from the 2.4 per cent figure reported in March largely due to food inflation jumping from four per cent to 4.7 per cent in the month.
Non-food inflation slowed to 1.2 per cent in April compared to 1.5 per cent the previous month, with clothing, footwear and electricals prices actually falling faster than during the previous month.
Stephen Robertson, Director General of the BRC, said: “In the face of falling consumer confidence, retailers’ efforts to generate sales with Easter discounts were key to holding back prices on non-food goods.
“But the upward pressures on food prices, which eased in March, bit back in April. The cost of world commodities, including sugar and wheat, rose even more quickly, inevitably working through to some shop prices.”
Falling shop price inflation in March was matched by the decrease in the official Consumer Prices Index compiled by the Office for National Statistics (ONS), which declined to four per cent from 4.4 per cent in February.
Today’s figures suggest that overall inflation is likely to start to climb again when official figures are released later this month after their temporary descent.
Robertson claims that the reason the shop price inflation has consistently stayed below the ONS figures is that retailers are offering huge promotions to customers to keep prices low.
Apparently 40 per cent of groceries currently being purchased are on discount but with prices unlikely to drop sharply anytime in the near future, household finances are likely to come under sustained pressure.
Mike Watkins, Senior Manager of Retail Services at Nielsen, commented: “With higher inflation likely to be with us for the near future, shoppers need to make the most of their more limited budgets and this will include looking for further savings when shopping.
“Supermarkets have responded by maintaining the highest-ever levels of promotional offers on groceries and non-food retailers are also delivering more price cuts and mid-season sales.”