Shop price inflation falls on slower food prices

Shop price inflation fell in April for the first time since the cut in VAT in December, as hefty non-food discounting at Easter, sharp price deflation at fashion and footwear retailers and the first slowdown in food prices this year gave customers a welcome boost.

The British Retail Consortium-Nielsen Shop Price Index reported that overall shop price inflation fell to 1.4 per cent in April from 2 per cent in March.

But non-food prices actually fell by 1.9 per cent in April, compared with the same month last year, and were lower than the 1.5 per cent decline in March. It was the fifth consecutive month of overall non-food price deflation. While last month's food price inflation was still high at 7.9 per cent year on year, it was lower than the 9 per cent uplift reported in March.

Stephen Robertson, the director general of the BRC, said: "There's some good news about prices in these figures. Heavy discounting left non-food goods nearly 2 per cent cheaper than a year ago and annual food inflation has slowed for the first time this year."

He added: "With food cheaper than a month ago, the worst of food price inflation may be over, thanks to a more stable value for the pound, but rising farm gate prices for meat and some vegetables are the main factors working against retailers' attempts to keep overall shopping bills down."

Clothing and footwear retailers contributed to the overall decline in non-food prices by posting 7.1 per cent deflation in April, which was the sharpest annual fall in prices since the inception of the BRC-Nielsen Price Index in 2006. Clothing and footwear prices in April fell down by 1.8 per cent on the previous month.