Retailers refrain from price rises despite looming costs, BRC finds
It comes as high street retailers are competing for reluctant shoppers, who are more likely to be pulled in with seasonal promotions
Retailers did not resort to price rises throughout March, according to the latest BRC-NIQ Shop Price Index, despite rising cost pressures.
It comes as high street retailers are competing for reluctant shoppers, who are more likely to be pulled in with seasonal promotions.
Mike Watkins, head of retailer and business insight at NielsenIQ, said: “With upwards pressure on prices, retailers may also need some focussed price cuts to help footfall in the run up to the late Easter.”
The latest NIQ data revealed that shop price inflation increased to -0.4% year-on-year in March, against a decline of -0.7% in February, which was above the three-month average of -0.6%.
Meanwhile, non-food inflation increased from -2.1% in February to -1.9% year-on-year in March, which was in line with the three-month average of 1.9%.
Food inflation rose to 2.4% year-on-year in March, against growth of 2.1% in February. This was above the three-month average increase of 2%. Fresh food inflation decreased to 1.4% from 1.5% in the month prior, which was also above the three-month average of 1.3%.
Helen Dickinson, chief executive of the BRC, said: “Retailers continue to do all they can to protect customers from the cost pressures bearing down on the industry. Prices fell for most non-food categories, which kept year-on-year overall shop prices in deflation, but at a reduced rate compared to February.
“Clothing and footwear was in double digit deflation as a result of weak consumer demand. Across food, price inflation rose year-on-year, with ambient food seeing the highest increase. For example, alcoholic and non-alcoholic beverages both saw price increases due to changes to duties and the hangover from high global sugar prices.”
She added: “With retailers bracing for significant extra costs which kick in later this week as a result of the Budget, inflation will likely accelerate in the coming months. Along with new packaging taxes later this year, retailers will be shouldering an additional £7bn in costs. It is crucial that the Employment Rights Bill and business rates reform don’t further inflate costs and increase red tape.”