Recent analysis by the British Retail Consortium (BRC) reveals a notable easing in shop price annual inflation, dropping to 0.8% in April from 1.3% in March. This decline, below the 3-month average rate of 1.4%, marks the lowest level of shop price inflation since December 2021, signaling a welcome respite for households amid ongoing economic uncertainties.

Key findings indicate that non-food items entered deflation territory at -0.6% in April, a significant decline from 0.2% in the previous month. This trend, below the 3-month average rate of 0.2%, reflects the lowest inflation level since October 2021. Meanwhile, food inflation decelerated to 3.4% in April, down from 3.7% in March, marking the 12th consecutive month of deceleration in the food category.

Further breakdown reveals that fresh food inflation moderated to 2.4% in April, down from 2.6% in March, while ambient food inflation slowed to 4.9%, down from 5.2% in the preceding month. These figures, below their respective 3-month average rates, underscore a broader trend of easing inflationary pressures across food categories.

Helen Dickinson, Chief Executive of the British Retail Consortium, noted that the normalization of shop price inflation levels brings relief to households. She highlighted the decline in non-food prices, particularly in clothing and footwear, driven by increased promotions to stimulate consumer spending. Additionally, food inflation’s sustained deceleration, attributed to falling prices of fresh products like butter, fish, and fruits, reflects easing input costs and intensified competition among grocers.

While consumers may welcome the moderation in shop price inflation, Dickinson cautioned that geopolitical tensions and their impact on commodity prices, such as oil, pose a threat to future price stability. She emphasized the importance of pro-growth policies by the government to enable businesses to invest in enhancing customer offerings while keeping prices competitive.

Mike Watkins, Head of Retailer and Business Insight at NielsenIQ, highlighted the positive impact of reduced grocery costs on household budgets, noting that many non-food goods are now cheaper than a year ago. He emphasized the role of retailers in promoting savings through continued promotional activities, which are expected to drive overall demand and support consumer spending in the coming months.

As economic uncertainties persist, the moderation in shop price inflation offers a glimmer of hope for consumers, providing some respite amidst ongoing challenges. With retailers striving to maintain competitive pricing and support consumer affordability, concerted efforts from both the public and private sectors are essential to ensure sustained stability in prices and continued consumer confidence in the retail sector.

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Last Update: May 1, 2024