According to the latest BRC-NIQ Shop Price Index, shop price inflation was unchanged at -0.7% year on year in February, against a decline of -0.7% in January.
Non-Food inflation decreased to -2.1% year on year in February, against a decline of -1.8% in January.
Helen Dickinson, Chief Executive of the BRC, says: “Breakfast, in particular, got more expensive as butter, cheese, eggs, bread and cereals all saw price hikes. Climbing global coffee prices could threaten to push the morning costs higher in the coming months.
“In non-food, MoM 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.
“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. We expect food prices to be over 4% up by the second half of the year.
Mike Watkins, Head of Retailer and Business Insight, NielsenIQ, said: “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. However, the increase in food inflation is likely to encourage even more shoppers to seek out the savings available from supermarket loyalty schemes.”
