The latest British Retail Consortium (BRC) figures reveal that overall shop price inflation remained unchanged at -0.7% year-on-year in February, consistent with January's figures and above the three-month average of -0.8%.
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Non-food inflation decreased to -2.1% from -1.8% in January, in line with the three-month average of -2.1%.
BRC Chief Executive Helen Dickinson commented on the findings, stating: 'While shop prices remained in deflation in February, prices on the month saw the biggest increase in the last year. In non-food, month-on-month prices rose as January sales promotions ended, especially in electricals and furniture. But discounting is still widespread in fashion as retailers tried to entice customers against a backdrop of weak demand.'
Looking ahead, Dickinson warned of rising inflationary pressures: 'Inflation will likely rise across the board as the year progresses with geopolitical tensions running high and the imminent £7bn increase in costs from the Autumn Budget and the new poorly designed packaging levy arriving on the doorsteps of retailers. If Government wants to keep inflation at bay, enable retailers to focus on growth, and help households, it must mitigate the swathe of costs facing the industry. It can start by ensuring no shop ends up paying more than they already do under the new business rates proposals, and delaying the new packaging taxes.'
Mike Watkins, Head of Retailer and Business Insight at NielsenIQ, noted how consumer behaviour may impact pricing trends: 'With many household bills increasing over the next few weeks, shoppers will be looking carefully at their discretionary spend and this may help keep prices lower at non-food retailers.'
As retailers navigate ongoing cost pressures, consumer spending habits and government policies will play a crucial role in shaping price movements in the coming months.
More information:
British Retail Consortium
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www.brc.org.uk