Shop price inflation on the rise

Shop prices rose at their fastest pace since December last month as the cost of non-food goods increased for the first time in more than a year, latest figures have shown.

Overall shop price inflation rose to 1.4% in March from 1.1% in February, according to the British Retail Consortium (BRC).%VIRTUAL-SkimlinksPromo%
Food price inflation remained stubbornly high at 3.5% in March, piling more pressure on cash-strapped consumers, while prices of non-food goods started rising for the first time in 15 months.

Prices rose across health and beauty products, stationery and DIY and gardening goods and books, said the BRC.

It added that the rate of year-on-year price deflation in shoes, footwear and electrical goods slowed to 2.2% from 4.2% in February. That meant overall non-food inflation stood at 0.2% in March, compared with 0.4% deflation in February.

Helen Dickinson, BRC director general, said the figures suggest "demand is strengthening and promotions are less widespread than last year".

She said: "Total inflation is at its highest rate since December, again reflecting that many retailers went into the new year with less stock to clear so discounting is less extensive compared with 2012."

Food prices continue to be driven by higher inflation in fruit, fish and meat, which is offsetting slower inflation for vegetables and dairy products.

But the BRC said the prolonged spell of cold and wet weather could lead to deeper discounting on spring lines emerging in figures for April.

Mike Watkins, head of retailer and business insight at Nielsen, said: "As discretionary spend for the next few months is expected to remain flat at best, what upward pressure there is on prices is not coming from the consumer at the moment."

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Shop price inflation on the rise

This takes time, but once you know the cost of a phone call, putting the dryer on, or a bag of potatoes, it enables you to judge far better how much you can afford to consume.

Once you know the base price, you are in a position to keep your eyes open for a better offer. If you see a discount you can judge for yourself whether it actually constitutes a bargain. For bigger things like utilities it enables you to do a proper price comparison and see if you can cut your bills.

Don't just assume that the premium range is better, try the every-day brand, or even the basic version and see if you spot the difference. Likewise, consider trading down your supermarket from one of the big players to local markets or discounters like Aldi.

If you plan what you buy to match what you actually cook and eat then not only will you be able to budget far more effectively, but you'll also waste much less and find your money goes further without you having to try.

If you can't think of a way to get your meat for less, consider a vegetarian day once a week. If you can't find petrol any cheaper, then work on making your driving as efficient as possible. The more you can think of clever alternatives the less you will have to make painful cuts to make ends meet.

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