Food prices have fallen for the first time in more than four years as supermarkets continue to push it in an effort to win over shoppers.
Advertising was also high when retailers withdrew offers while buying panic in the early stages of the corona virus epidemic, according to the latest retail price index of the British Retail Association and Nielsen.
Food prices fell 0.6% in April, up 0.3% from the previous month. This is the first time since January 2017 that prices have been deflationary.
New food prices fell for the fifth month in a row, rising to 1.5%, compared to a 0.8% decline in March.
Environmental food inflation eased to 0.6% in April from 1.7% in March, the lowest level since March 2018.
PRC CEO Helen Dickinson said the fall in food prices was the result of fewer promotions compared to a year ago as retailers tried to prevent shoppers from stockpiling during the first lockout.
Overall store prices fell 1.3% in April, a slower decline than the 2.4% seen in March, while non-food inflation fell significantly to 1.7%, compared to a 4% decline in the previous month.
Dickinson retailers continued to discount products, especially on last season’s stocks, leading to the latest products before reopening. However, some products, such as furniture, are generally in high demand and prices have risen due to disruption of global supply chains.
He warned that falling prices were unlikely to continue. “In the coming months, retailers will have to contend with cost pressures coming from the Brexit red-tape, which will increase shipping costs due to international supply problems, as well as rising global food and oil prices.
“As these costs are being filtered out, retailers have no choice but to pass on some of these costs to consumers. New checks and documentation requirements this fall could help alleviate this pressure by avoiding adding more friction to the import of goods.”
Mike Watkins, Nielsen’s retailer and head of business intelligence, said: “The good news is that as the economy reopens, we’re starting to see a rebound in consumer spending, and store price inflation is still there.
“Looking ahead, shoppers are likely to become more price sensitive in the next few months as many homes become uncertain about their personal finances and external cost pressures begin to feed, as lifestyles adapt to the new nature.”