Food prices rise at fastest rate for more than three years
Food inflation hit 1% year-on-year last month, the sharpest rise since February 2014 and marking the second month in a row of rising prices, according to the latest BRC-Nielsen Shop Price Index.
It comes as the squeeze on household finances tightens, with official data recently revealing that wider consumer prices index (CPI) inflation jumped to 2.3% in February - its highest level since September 2013.
But the British Retail Consortium (BRC) said the supermarket price war has continued to keep a lid on price rises, shielding consumers from even steeper cost increases.
Overall shop prices were also lower once more in March, down 0.8% year-on-year as non-food deflation accelerated to 2% from the 1.8% fall in February - maintaining four years of falling prices.
BRC chief executive Helen Dickinson said: "Global food commodity costs have risen by 17% on average over last year's figures, building substantial pressure in the food supply chain.
"Although UK food shop prices are seeing their steepest rise this month for over three years, the increase is still only 1%, reflecting the continuing intense competition between retailers.
"The limited increase is even more impressive given the magnitude of the devaluation in sterling."
Food retailers and restaurants have been grappling with rising cost pressures from the pound's plunge in value, which makes it more expensive to import, while this year they were also knocked by a shortage of vegetables after shock weather conditions in southern Europe ravaged crops.
The most recent figures from the Office for National Statistics showed the price of an iceberg lettuce jumped 67.2% between January and February after falling 0.8% a year earlier.
The price of tomatoes also jumped from £2.05 a kilogram to £2.20 over the two months, while a cucumber rose in price from 51p to 57p.
The latest BRC-Nielsen report showed ambient food saw the steepest price rises in March, up 1.3% year-on-year, while fresh food inflation stood at 0.9%.
In the non-food category, the biggest price falls were seen across clothing and footwear, with deflation of 5.9% year-on-year, followed by furniture and floorings, where prices were 2.6% lower.
Mike Watkins, head of retailer and business insight at Nielsen, said: "Inflation is gaining momentum across the economy, but in food retailing the cost price increases being passed on to shoppers in March was lower than the consumer price index and in the non-food channel there is still deflation.
"We anticipate this trend to continue over the next few months."