Good news for households as prices fall

Period Covered: 01 – 07 March 2024

• Shop Price annual inflation eased to 1.3% in March, down from 2.5% in February. This is below the 3-month average rate of 2.2%. Shop price annual growth is its lowest since December 2021.
• Non-Food inflation fell to 0.2% in March, down from 1.3% in the preceding month. This is below the 3-month average rate of 0.9%. Inflation is its lowest since January 2022.
• Food inflation decelerated to 3.7% in March, down from 5.0% in February. This is below the 3-month average rate of 4.8% and is the tenth consecutive deceleration in the food category. Inflation is its lowest since April 2022.
• Fresh Food inflation slowed further in March, to 2.6%, down from 3.4% in February. This is below the 3-month average rate of 3.6%. Inflation is its lowest since November 2021.
• Ambient Food inflation decelerated to 5.2% in March, down from 7.2% in February. This is below the 3-month average rate of 6.6% and is the lowest since June 2022.

Note: Month-on-month % change refers to changes in the level of prices.

Helen Dickinson, Chief Executive of the British Retail Consortium, said:
“Shop price inflation eased to the lowest level since December 2021 last month as retailers continued to compete fiercely to bring prices down for their customers. While Easter treats were more expensive than in previous years due to high global cocoa and sugar prices, retailers provided cracking deals on popular chocolates, which led to price falls compared to the previous month. Dairy prices also fell on the month as farmgate prices eased, and retailers worked hard to lower prices for many essentials. In non-food, prices of electricals, clothing and footwear fell as retailers increased promotions to entice consumer spending.

“While these figures are good news for consumers, from this month, retailers face significant increased cost pressures that could put progress on bringing down inflation at risk. These costs include a 6.7% business rates rise, ill-thought-out recycling proposals, and new border checks – all at the same time as the largest rise to the National Living Wage on record. The industry needs pro-growth government policy that supports investment and helps keep down prices for households up and down the country.”

Mike Watkins, Head of Retailer and Business Insight, NielsenIQ, said:
“The slowdown in inflation continues and a key driver this month was a further fall in food prices. A year ago, food inflation was 15% so this was to be expected. But it is also helped by intense competition amongst the supermarkets as they look to drive footfall, with focussed price cuts and promotional offers earlier in the month for Mother’s Day and now again in the weeks leading up to Easter.”