Demand strengthening as shop price inflation rises
Shop prices rose at their fastest pace since December last month as the cost of non-food goods increased for the first time in more than a year, new figures show.
Overall shop price inflation rose to 1.4% in March from 1.1% in February, according to the British Retail Consortium (BRC).
Food price inflation remained stubbornly high at 3.5% in March, piling more pressure on cash-strapped consumers, while prices of non-food goods started rising for the first time in 15 months.
Prices rose across health and beauty products, stationery and DIY and gardening goods and books, the BRC said.
It added that the rate of year-on-year price deflation in shoes, footwear and electrical goods slowed to 2.2% from 4.2% in February. That meant overall non-food inflation stood at 0.2% in March, compared with 0.4% deflation in February.
Helen Dickinson, BRC director general, said the figures suggest "demand is strengthening and promotions are less widespread than last year".
She said: "Total inflation is at its highest rate since December, again reflecting that many retailers went into the new year with less stock to clear so discounting is less extensive compared with 2012."
Food prices continue to be driven by higher inflation in fruit, fish and meat produce, which is offsetting the slower inflation for vegetables and dairy products.
But the BRC said the prolonged spell of cold and wet weather could lead to deeper discounting on spring lines emerging in figures for April. Mike Watkins, head of retailer and business insight at Nielsen, said: "As discretionary spend for the next few months is expected to remain flat at best, what upward pressure there is on prices is not coming from the consumer at the moment."