Coronavirus: Shop prices plummet at sharpest rate since 2017

Shop prices fell by 1.7% in April, marking a steeper decline than the 0.8% recorded in March. This is the steepest rate of decline in shop prices since January 2017, according to the BRC-Nielsen Shop Price Index.

The fall was even steeper than the 12- and six- month average decreases of 0.4% and 0.7%, respectively.

Non-food prices fell sharply by 3.7% in April, compared with a decline of 1.9% in March, marking the highest rate of decline since the index began in December 2006.

Food inflation accelerated to 1.8% in April, up from 1.1% in March and above the 12- and 6-month average price increases of 1.5% and 1.5%, respectively. 

This was spurred by inflation in both fresh food and ambient food. Fresh food inflation accelerated to 1% in April, up from 0.4% in March, and ambient food inflation accelerated to 3% in April, up from 2% in March. 

BRC chief executive Helen Dickinson said: “Overall, shop prices fell in April, with a larger drop in non-food prices outweighing the rise in food inflation. Food retailers offered fewer promotions this April as they worked to discourage the consumer stockpiling of the previous month, pushing food inflation slightly above average.

“In contrast, some non-food sectors, particularly clothing and footwear and furniture, were hard hit, as discretionary spending evaporated, resulting in deep price cuts.”

Nielsen head of retailer and business insight Mike Watkins added: “With lockdown effectively closing the high street, non-food retailers are reliant on online sales, and prices have fallen as they look to sell stock.

“Across the supermarkets, there has been a reduction of promotions to help availability, as well as some supply chain constraints, which has led to a small increase in shop prices, primarily in ambient foods.

“With such a significant disruption to shopping behaviour, the industry continues to do a marvellous job in helping to feed the nation in these difficult times.”