Shop price inflation eased in February thanks to fierce competition between retailers along with falling global food costs, according to the BRC.
Overall shop price inflation for the month was 1.1% year on year, down from 1.5% in January, according to the latest BRC-NIQ Shop Price Monitor. The February figure was in line with the average over three months.
Food inflation was 3.5% in February, also in line with the average over three months but down from 3.9% in January.
Ambient food inflation dropped to its lowest level in four years, at 2.3% in February, down from 3.1% in January.
Fresh food inflation also slowed, to 4.3% in February, down from 4.4% in January, though it remained above the three-month average of 4.2%.
Non-food prices fell by 0.1% year on year in February, compared with 0.3% inflation in January.
“Households got some welcome relief in February as shop price inflation eased,” said BRC CEO Helen Dickinson. “Fierce competition between retailers kept price rises in check, with promotions across health, beauty and fashion. Falling global food costs also fed through, pushing food inflation down.”
Mike Watkins, NIQ head of retailer and business insight, said: “Since the start of the year, we have seen some competitive pricing across both the food and non-food channels, which is helping to bring down inflation. Whilst the inclement weather and weak sentiment is making consumer demand rather unpredictable for retailers, at least shoppers are now seeing some of their cost of living pressures start to ease.”
However, Dickinson warned the relief for households could prove short-lived depending on the government’s handling of the Employment Rights Act.
“While the direction of travel is promising, prices are still rising, and many consumers remain under pressure,” she said. “Retail operates on thin margins yet has faced relentless tax rises in recent years.
“The Employment Rights Act could add further complexity if secondary legislation is implemented without an eye firmly on the potential consequences for the cost of doing business and hence the cost of living. Poor implementation decisions by government would stymie job creation and push inflation back up.”
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