Shop price deflation offers respite to consumers
A substantial slowdown in food price rises has provided welcome respite for consumers as the impact of the pound's depreciation one year on begins to fade, figures show.
Shop price deflation accelerated to 1% in March - its deepest rate since February 2017 - from 0.8% in February, driven by the lowest rate of food inflation for a year, according to the BRC-Nielsen Shop Price Index.
Food inflation took a significant tumble from 1.6% in February to 0.4% last month - also the lowest rate since February 2017.
Prices of fresh food increased by 0.3% in March, a slowdown from the 0.9% rise recorded in February, the lowest rate of inflation since March last year.
Meanwhile, ambient food prices increased by 0.6% in March after rising by 2.5% just the month before.
Deflation in non-food prices eased in March to a rate of 1.9% compared with February's 2.2%.
British Retail Consortium chief executive Helen Dickinson said: "As the impact of the pound's depreciation one year on are beginning to fizzle out, retailers are passing the positive impact through to the shop floor.
"So some welcome respite for consumers, particularly with the gap between inflation and wage growth finally narrowing. But with further wage increases on the horizon putting upward pressure on prices, consumers will continue to feel the grip on their spending power."
Mike Watkins, head of retailer and business insight at Nielsen, said: "With inflationary pressure receding in the food supply chain, we can now expect supermarkets to focus on lowering prices and to use promotions to drive visits as part of the battle for gaining share of wallet.
"With 27% of the value of the shopping basket being discounted by offers or short-term price cuts, which is a 10-year low, shoppers will take advantage of any increase in discounting as they seek out the best value for money."