Low demand keeps prices down
Period Covered: 01 – 05 March 2021
- Shop Prices fell by 2.4% in March, the same rate of decline as in February. This is below the 12- and 6-month average price decreases of 1.8% and 2.0%, respectively.
- Non-Food prices fell by 4.0% in March, compared to a decline of 3.9% in February. This is the fastest rate of decline since May 2020. This is below the 12- and 6-month average price declines of 3.5% and 3.5%, respectively.
- Food inflation inched up to 0.3% in March, up from 0.2% in February. This is below the 12- and 6-month average price increases of 1.0% and 0.6%, respectively.
- Fresh Food prices fell for the fourth consecutive month in March, at a steady decline rate of 0.8%, the same rate as in the previous two months. This is below the 12- and 6-month average price growth rates of 0.0% and -0.4%, respectively.
- Ambient Food inflation rose to 1.7% in March, up from 1.6% in February. This is below the 12- and 6-month average price increases of 2.4% and 2.0%, respectively.
Helen Dickinson OBE, chief executive, British Retail Consortium: “Retail prices fell again in March as the third consecutive month of lockdown led many non-food retailers, especially clothing, to heavily discount their products. Low demand and intense competition online will help thrifty consumers find the bargains they are looking for. Prices of fashion and footwear have seen double digit declines in 11 of the past 12 months, highlighting how those worst hit have been working hard to tempt consumer spending. While food prices inched up slightly compared to last year, they remain significantly below long-term averages, as grocers fiercely protect their market shares.
“Unfortunately, many retailers may not be able to sustain these low prices in the coming months. Rising global food prices, at their highest since 2014, as well as increased oil prices and shipping costs, and Brexit red tape will likely begin to filter through, pushing up prices at tills. Government must ensure that new checks and documentation requirements this autumn avoid introducing significant friction on the import of goods, otherwise British consumers will end up paying the price.”
Mike Watkins, head of retailer and business insight, Nielsen: “With consumer spend limited by pandemic restrictions, non-food retailers are keeping any supply side driven price increases to a minimum and in some cases are reducing prices, to encourage shoppers to maintain spending in the run up to Easter. Whilst food retailers have seen top line sales grow at around 9% since the start of the year, we are now lapping the extreme comparatives of March last year and shop price inflation in food still remains very low and less than CPI.”
