Supplies

Food price inflation falls again to 1%

Carly Hacon | 12 April 2018 | 6 years ago

Fresh food inflation slowed to the lowest rate since March 2017.
Food inflation fell to a 12-month low in March giving a much-needed boost to hard-pressed consumers.

The BRC-Nielsen Shop Price Index revealed that shop price deflation deepened to 1 per cent in March from 0.8 per cent in February. That means that shop prices have been deflationary for 59 months now marking the deepest deflation since February 2017.

The deflation in non-food prices eased during the month with prices decreasing at a rate of 1.9 per cent compared to February when prices declined by 2.2 per cent.

Meanwhile food inflation slowed down substantially in March with inflation standing at 0.4 per cent, down from 1.6 per cent in February. Again, this is the lowest food inflation rate since February last year.

Fresh food inflation slowed to the lowest rate since March 2017 with prices rising by 0.3 per cent compared to 0.9 per cent in February. Ambient food prices rose by 0.6 per cent down from 2.5 per cent in February.

Helen Dickinson, chief executive of the British Retail Consortium, said: Shop price deflation accelerated in March, driven by a substantial slowdown in food inflation, which reached its lowest rate for a year.

as the impact of the pound’s depreciation one year on are beginning to fizzle out, retailers are passing the positive impact through to the shop floor.

‘so, some welcome respite for consumers, particularly with the gap between inflation and wage growth finally narrowing. But with further wage increases on the horizon putting upward pressure on prices, consumers will continue to feel the grip on their spending power.

Dickinson added that the support for a zero-tariff trade deal on the end-status Brexit agreement between the EU and UK, is encouraging news for retailers.

But, she warned that this needs to be accompanied by a focus on reducing potential customs friction on the movement of goods, in order for retailers to mitigate any further pressure on prices for their customers.

Mike Watkins, head of Retailer and Business Insight, Nielsen, said the figures will put pressure on supermarkets and retailers to react.

Nielsen said: Consumers are still coping with falling disposable incomes and non-food retailersare having to keep price increases to a minimum or make further price cuts, as consumer demandhas been weak since the start of the year, he said.

with inflationarypressure receding in the food supply chain, we can now expect supermarkets to focus on lowering prices and to use promotions to drive visits as part of the battle for gaining share of wallet.

with 27 per cent of the value of the shopping basket being discounted by offers or short-term price cuts, which is a 10-year low, shoppers will take advantage of any increase in discounting as they seek out the best value for money.

 

Rising food and fuel costs put key UK sectors under pressure

Topic

Supplies

Related Topics

If cruelty-free is the future,  how can your business embrace it?
27 February 2019

If cruelty-free is the future, how can your business embrace it?

Read More →
Employers urged by staff to protect the environment better
6 December 2018

Employers urged by staff to protect the environment better

Read More →
Global crackdown on harmful emissions drives surge in green energy patents
2 October 2018

Global crackdown on harmful emissions drives surge in green energy patents

Read More →
Business owners send cyber security message to negligent suppliers
25 September 2018

Business owners send cyber security message to negligent suppliers

Read More →
Poor broadband coverage threatens digital tax transition for rural micro businesses
22 August 2018

Poor broadband coverage threatens digital tax transition for rural micro businesses

Read More →
5 signs your micro business needs to switch energy suppliers
21 August 2018

5 signs your micro business needs to switch energy suppliers

Read More →

If you enjoy reading our articles,
why not sign up for our newsletter?

We commit to just delivering high-quality material that is specially crafted for our audience.

Join Our Newsletter