Food inflation continued to edge up in March, despite retailers doing “all they can” to avert pressures bearing down on the industry, figures show.
Food prices overall are now 2.4% higher than last March, up from 2.1% in February and above the three-month average of 2%, according to the British Retail Consortium (BRC)-NIQ Shop Price Index.
Ambient food inflation saw the biggest increase, to 3.7% from February’s 2.8%, with alcoholic and non-alcoholic beverages both recording price increases because of duty changes and the hangover from high global sugar prices.
Fresh food prices are 1.4% higher than a year ago, a slight dip from February’s 1.5%.
Shop prices overall are 0.4% cheaper than last March, a slowing on last month’s 0.7% decline, driven by clothing and footwear falling into double digit deflation as a result of weak consumer demand.
BRC chief executive Helen Dickinson said: “Retailers continue to do all they can to protect customers from the cost pressures bearing down on the industry.
“Prices fell for most non-food categories, which kept year-on-year overall shop prices in deflation, but at a reduced rate compared to February.
“With retailers bracing for significant extra costs which kick in later this week as a result of the Budget, inflation will likely accelerate in the coming months.
“Along with new packaging taxes later this year, retailers will be shouldering an additional £7 billion in costs. It is crucial that the Employment Rights Bill and business rates reform don’t further inflate costs and increase red tape.”
Mike Watkins, head of retailer and business insight at NielsenIQ, said: “There is competition on the high street as retailers look to pull in reluctant shoppers with seasonal promotions.
“However, with upwards pressure on prices, retailers may also need some focused price cuts to help footfall in the run up to the late Easter.”
