Shop price inflation slows due to surge in discounts

Shop price inflation decelerated to 0.4% in April, down from 0.9% in March and below the six-month average inflation of 0.5%, according to the BRC-Nielson Shop Price Index.

Food price inflation decreased to 2.2% during April, down from 2.5% the previous month; fresh food inflation eased to 1.5%, down from 1.9% in March.

Although ambient food inflation slowed to 3.2% during the same period, down from 3.4% in March, this was above both the 12- and six-month averages of 2.2% and 2.4% respectively – the second-highest inflation rate since April 2013.

BRC chief executive Helen Dickinson said promotional activity throughout April has been the driving force behind the deceleration.

“There were more than double the number of product lines on discount this month compared to the previous, as retailers hope to recover ground after March’s disappointing sales figures.

“Intense competition may be benefiting consumers but is cutting into the already slim margins of retailers,” she said.

“In order to be successful, retailers must invest in both their physical and digital offerings to ensure they can provide the customer experience consumers want. However, investment comes at a cost and unless the Government acts to reform the broken business rates system, we may find more store closures and job losses on the horizon.”