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Shop prices slide amid UK lockdown, says BRC

The price of shop goods slipped by 0.8% in March, down from 0.6% the month prior, according to the latest BRC-Nielsen Shop Price Index. 

In the same month, non-food prices fell by 1.9%, which marked the highest rate of decline in non-food prices since May 2018.

The lowered prices were largely driven by food inflation, which eased to 1.1% in the period, down from 1.6% in February

Fresh food inflation eased for the third consecutive month, as prices rose by only 0.4%. This showed a further slowdown from the 0.6% deflation seen in February, and marked the lowest inflation rate since March 2018.

Meanwhile, ambient food inflation also “slowed sharply” to 2%, down from 3% in February. 

Helen Dickinson, chief executive at the British Retail Consortium, said: “As of the first week of March, when our price collection took place, shop prices were pushed further into deflationary territory, with food inflation easing and non-food prices continuing to fall.   

“Fresh food prices rose by a modest 0.4%, as lower global prices in 2019 filtered through, limiting the price rises of meat, dairy and fish products. Non-food prices fell again in March as household spending remained low.”

However, Dickinson warned that the coronavirus crisis could put a “number of price pressures” on food in the coming months. 

Fresh produce may particularly be impacted by higher costs on seasonal farm labour, she predicted. 

She said: “It is likely that the combination of future economic uncertainty and job losses, whether realised or potential, will drive people to reconsider their spending patterns and to save more.”

She added it is now “vital” that the government monitors the situation carefully and is “ready to continue taking bold action” where necessary to support jobs and businesses.

Mike Watkins, head of retailer and business insight, Nielsen, added: “The weak demand for many goods and services means non-food retailers continue to battle hard for consumer spending by keeping prices down wherever possible. 

“And across supermarkets, the recent upwards pressure on food prices slowed a little in March, with a slowdown in the rate of inflation in both ambient and fresh foods.”

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