Food retailers have continued to keep a lid on inflation, official figures show, as the high street suffered its worst month in 15 years.

The Consumer Price Index fell from 4.4% in February to 4% last month – with food prices down 1.5% month-on-month, according to the Office for National Statistics.

The data comes after latest Grocer Price Index – which takes into account promotions, unlike the ONS data – recorded a 0.7% month-on-month dip in food prices for March.

Meanwhile, figures released today by the British Retail Consortium paint a bleak picture of life on the high street. Sales across all categories were down by 3.5% on a like-for-like basis in March, falling by 1.9% overall.

Food sales were again more resilient, down by 0.3% on a like-for-like basis for the first three months of the year – thanks in part to the late Easter – but up 2.2% overall.

By contrast, total non-food sales were flat, down 1.1% on a like-for-like basis over the same period.

“This is the worst drop in total sales since we first collected these figures in 1995,” said BRC director general Stephen Robertson.

“Non-food retailers were hit particularly hard. This year's later Easter is a factor but this fall goes way beyond anything that can be explained by that alone. Uncomfortably high inflation and low wage growth have produced the first year-on-year fall in disposable incomes for thirty years.”

IGD chief executive Joanne Denney-Finch added: “Our ShopperTrack research shows shoppers are using different types of retail formats, from supermarkets to convenience stores and online. They are not looking to trade down in quality, but are reassessing what offers the best value. 

“Food retailers and manufacturers will be hoping for a boost from Easter, the Royal wedding and the continuation of the recent barbecue weather.”

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Grocer Price Index: Asda is the most successful at keeping inflation in check (2 April 2011)

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