Non-food prices accelerated last month, up 0.2 per cent on a month earlier after February‘s five month low, hitting its highest rate in 15 months, new figures released today reveal.
Overall shop price inflation grew to 1.4 per cent in March thanks to reinvigorated consumer demand and a decline in discounting, according to the British Retail Consortium (BRC)- Nielsen Shop Price Index, while food inflation remained steady at 3.5 per cent, a trend likely to continue in the medium term.
“Non-food prices have edged into inflationary territory for the first time in 15 months, driven by gradual growth across a number of categories rather than any one seeing a substantial increase,” explained BRC Director General Helen Dickinson.
“It bears out anecdotal evidence that demand is strengthening and promotions are less widespread than last year.
“Total inflation is at its highest rate since December, again reflecting that many retailers went into the New Year with less stock to clear so discounting is less extensive compared with 2012.
“Next month will be the ‘one to watch‘. It‘ll be interesting to see if the prolonged unseasonably cold and wet weather leads to deeper discounting on Spring lines for some retailers.”
Clothing & footwear reported a further decline as cold weather continued to impede growth and Mike Watkins, Head of Retailer and Business Insight at Nielsen, explained that the unseasonably chilly temperatures are having a widespread effect.
“With cold weather in March holding back spending across many channels, price reductions have been needed to stimulate demand for food and there was also an increase in price competition at the supermarkets due to Easter promotions, keeping overall food inflation stable,” he said.
“As discretionary spend for the next few months is expected to remain flat at best, what upward pressure there is on prices is not coming from the consumer at the moment.”