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Shop price inflaton has contracted significantly in March, dropping to just 1.3% and the lowest level since December 2021.

According to the BRC-NielsenIQ Shop Price Index for March annual inflation fell back from 2.5% in February to 1.3% last month as the rate of price increases reduced in both food and non-food.

Food inflation decelerated to 3.7% in March, down from 5.0% in February.

This is below the three-month average rate of 4.8% and is the 10th consecutive deceleration in the food category. Inflation is its lowest since April 2022.

Fresh food inflation slowed further in March, to 2.6%, down from 3.4% in February, while ambient food inflation decelerated to 5.2% in March, down from 7.2% in February.

Non-food inflation fell to 0.2% in March, down from 1.3% in the preceding month.

“Shop price inflation eased to the lowest level since December 2021 last month as retailers continued to compete fiercely to bring prices down for their customers,” said BRC CEO Helen Dickinson.

“While Easter treats were more expensive than in previous years due to high global cocoa and sugar prices, retailers provided cracking deals on popular chocolates, which led to price falls compared to the previous month. Dairy prices also fell on the month as farmgate prices eased, and retailers worked hard to lower prices for many essentials. In non-food, prices of electricals, clothing and footwear fell as retailers increased promotions to entice consumer spending.

“While these figures are good news for consumers, from this month, retailers face significant increased cost pressures that could put progress on bringing down inflation at risk. These costs include a 6.7% business rates rise, ill-thought-out recycling proposals, and new border checks – all at the same time as the largest rise to the national living wage on record.

“The industry needs pro-growth government policy that supports investment and helps keep down prices for households up and down the country.”

Mike Watkins, head of retailer and business insight, NielsenIQ, added: “The slowdown in inflation continues and a key driver this month was a further fall in food prices. A year ago, food inflation was 15% so this was to be expected.

“But it is also helped by intense competition amongst the supermarkets as they look to drive footfall, with focused price cuts and promotional offers earlier in the month for Mother’s Day and now again in the weeks leading up to Easter.”

Morning update

Naked Wines has confirmed the appointment of new CEO Rodrigo Maza effective from today, following the announcement of his appointment in February.

The onlinewine  merchant has also announced the appointment of Paul Calandrella as general manager, Naked Wines USA. He will join the group from mid-April and has two decades of experience in consumer-focused roles in both brand and retail, including at Amazon, REI and, most recently, a venture-backed, re-commerce startup.

Rowan Gormley will now return to his previous role as non-executive chairman and “will continue to assist Maza and Paul with their handovers as necessary”.

Pub group Revolution Bars has seen trading of its shares suspended after the company was “unable” to publish its interim results by 30 March.

Last week the group, which operates 58 bars and 22 gastro pubs, trading mainly under the Revolution, Revolución de Cuba and Peach Pubs brands, announced it was exploring a number of strategic options following a period of weak trading.

The group said these options included a restructuring plan for parts of the group, a sale of all or part of the business and any other avenue to maximise returns for stakeholders.

It is currently engaged with key shareholders and other investors, including Luke Johnson, in respect of a fundraising.

On the markets this morning, the FTSE has opened the week strongly, up 0.8% to 8,004.8pts.

Early grocery risers include Just Eat, up 4% to 1,224p, Greencore, up 3.6% to 123.6p and Glanbia, up 3.2% to €18.50.

Fallers so far include Reckitt Benckiser, down 2% to 4,421p, Naked Wines, down 1.8% to 55.2p and Fever-Tree, down 1.7% to 1,181p.

This week in the City

A quiet week back following the Easter break is highlighted by the release of the NielsenIQ grocery market share figures tomorrow.

There is little else scheduled in the diary until Tesco’s annual results on 10 April.