Shop price deflation slows in April as consumers head back to stores

Shop price deflation eased to 1.3% in April 2021, compared with the 2.4% decrease in March, as excited consumers took advantage of store reopenings, according to the BRC-Nielsen shop price index.

This was above the 12- and six-month average price decreases of 1.8% and 2.0% respectively.

The drop in non-food prices slowed significantly to 1.7%, down from a decline of 4% the previous month, with fewer retailers turning to discounting to persuade customers to buy.

This was the slowest rate of decline since January 2020, and above the 12- and six-month average price declines of 3.4% and 3.4%, respectively.

Food prices fell for the first time since January 2017, down by 0.6% in April, compared to a 0.3% rise in March.

This figure was particularly affected by fresh food prices, which fell for the fifth consecutive month by 1.5% in April - an accleration from the 0.8% decline the previous month.

BRC chief executive Helen Dickinson said: “Prices fell in April year-on-year for both non-food and food. The decline in food prices was the result of fewer promotions in the comparison period, April 2020, as retailers tried to deter shoppers from stockpiling before and during the first lockdown.

”Non-food deflation continued, with retailers discounting goods, particularly on last season’s stock as they made way for the latest products ahead of re-opening. However, some products, such as furniture, saw prices generally rise due to the combination of high demand and disruption to global supply chains.”

Nielsen head of insight Mike Watkins added: “With the economy reopening we will start to see a rebalancing of consumer spend, and it’s good news that there is still shop price deflation.

”Shoppers may become more price-sentitive over the next few months as lifestyles are adapted”

“Looking ahead, with many households uncertain about their personal finances, if external cost pressures start to feed through then shoppers may become more price sensitive over the next few months, as lifestyles are adapted to a new normal.”