Food prices have fallen back into deflation after January’s “blip”, according to the BRC-Nielsen Shop Price Index for February.
The month saw prices fall back 0.4% year on year, compared with the 0.1% rise in January.
Overall, the SPI was down 2% in February from 1.8% in January, the 34th consecutive month of deflation. On a 12-month average, the SPI dropped 1.8% compared with a year ago.
Mike Watkins, head of retailer and business insight at Nielsen, said competing for market share was still a challenge for many food and non-food retailers, with intense competition on the high street.
“Food prices continue to fall as supermarkets are working hard to stimulate sales with price cuts rather than multibuy promotions, and this is leading to continued deflation in food.
“With uncertain market conditions, offers and discounts are likely to continue for the time being.”
The statistics prompted the BRC to urge the government to work with it to address the ongoing issue of business rates and the impact of the national living wage and apprenticeship levy.
BRC chief executive Helen Dickinson said the latest fall in prices showed competition in the industry was continuing apace. For non-food prices, it marked the 35th consecutive month of deflation.
“Non-food, clothing, footwear, electricals, DIY, and books all saw large reductions in prices while the move back into deflationary territory in the food category confirmed that last month’s marginal rise was just a blip,” Dickinson said.
“With consumer confidence falling back and wage growth remaining subdued, retailers continue to support their customers with prices and promotions to maintain market share in the tough trading environment.”
“Against this backdrop we are asking government to work more collaboratively with us to address business rates and ensure the successful implementation of policy measures, such as the national living wage and the apprenticeship levy.”
No comments yet