Shop price inflation falls to lowest level since December 2021

Annual shop price inflation eased to 1.3% in March, down from 2.5% in February and below the three-month average of 2.2%, according to the latest BRC-NielsenIQ Shop Price Index.

Food inflation declined to 3.7% in March, down from 5.0% in the month before. March marked the 10th consecutive monthly decline in the food category as inflation reached its lowest since April 2022.

Fresh food inflation slowed further in March, to 2.6%, down from 3.4% in February. This was below the three-month average rate of 3.6%. 

Ambient food inflation slowed to 5.2% in March, down from 7.2% in February and at its lowest since June 2022.

Non-food inflation fell to 0.2% in March, down from 1.3% in the month before, which is its lowest since January 2022.

BRC chief executive Helen Dickinson said: “Shop price inflation eased to the lowest level since December 2021 last month as retailers continued to compete fiercely to bring prices down for their customers. While Easter treats were more expensive than in previous years due to high global cocoa and sugar prices, retailers provided cracking deals on popular chocolates, which led to price falls compared to the previous month.

“Dairy prices also fell on the month as farmgate prices eased, and retailers worked hard to lower prices for many essentials. In non-food, prices of electricals, clothing and footwear fell as retailers increased promotions to entice consumer spending.

“While these figures are good news for consumers, from this month, retailers face significant increased cost pressures that could put progress on bringing down inflation at risk.

”These costs include a 6.7% business rates rise, ill-thought-out recycling proposals, and new border checks – all at the same time as the largest rise to the national living wage on record. The industry needs pro-growth government policy that supports investment and helps keep down prices for households up and down the country.”