Shop price inflation at highest level in nearly six years

The BRC-Nielsen Shop Price Index has revealed that shop price inflation accelerated in March to 0.9%, a rise on February’s figure of 0.7%, which is the highest inflation rate since March 2013.

Food inflation rose in the same period, up to 2.5% in March compared to 1.6% in February, the highest inflation rate since November 2013.

The rise in inflation has been attributed to global commodity prices and bad weather from last year resulting in lower yields in certain crops, such as onions, potatoes and cabbage. The BRC also says that rises in global cereal prices pushed up the price of bread.

“March saw Shop Price inflation rise to its highest level in six years, driven primarily by a sharp spike in non-perishable food inflation,” said Helen Dickinson, chief executive of the BRC. “Increases in global commodity prices and adverse weather events put upward pressures on the wholesale prices of many foodstuffs which, coupled with rises in the cost of alcoholic and non-alcoholic beverages, pushed food inflation from 1.6% in February to 2.5% in March.”

“Nonetheless, the bigger threat to food inflation remains the risks of a chaotic no-deal Brexit, which would lead to higher prices and less choice on the shelves. In order to avoid this scenario, parliamentarians from all parties must find a compromise that can command a majority in the House of Commons.”

Mike Watkins, head of retailer and business insight at Nielsen added: “The upwards pressure on pricing continues across food retailing and a key driver this month was inflation in ambient food and drink. With shoppers looking to stretch their budget for the weekly grocery shop this will not help volume growth, which has been slowing since the start of the year.”