Shop prices remain under pressure – BRC

by | Apr 28, 2021

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UK shop prices continued to fall in April, industry data showed on Wednesday, although the rate of decline has started to ease.
According to the latest BRC-NielsenIQ Shop Price Index, prices fell by 1.3% year-on-year in April.

That was a slower decline than March’s 2.4% fall, however, and above both the 12- and six-month averages, for decreases of 1.8% and 2.0% respectively.

Non-food deflation was 1.7%, compared to 4.0% in March, while food prices fell following March’s 0.3% rise, and were off 0.6%. The decline marks the first time food prices have been deflationary since January 2017.

Helen Dickinson, chief executive of the British Retail Consortium, said: “The decline in food prices was the result of fewer promotions in the comparison period, April 2020, as retailers tried to deter shoppers from stockpiling before and during the first lockdown.”

She added: “Falling prices are unlikely last. In the months ahead, retailers will have to battle the cost pressure from Brexit red tape, rising shipping costs due to international supply issues, as well as increasingly global food and oil prices. As these costs filter through, retailers may be left with no option but to pass on some of these costs to consumers.”

Mike Watkins, head of retailer and business insight at NielsenIQ, said: “With the economy reopening, we will start to see a rebalancing of consumer spend and its good news that there is still shop price deflation.

“Looking ahead, with many households uncertain about their personal finances, if external costs pressures start to feed through then shoppers may become more price sensitive over the next few months, as lifestyles are adapted to a new normal.”

The data follows research published on Tuesday that showed retail sales had grown at their fastest rate in April since 2018, as non-essential retail started to reopen. Separate data also showed that take-home grocery sales were continuing to grow as the vaccine rollout helped boost shopper confidence.

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