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Published on March 1st, 2017 | by The GC Team

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Non-food inflation eases in February

According to the BRC-Nielsen Shop Price Index, overall shop prices fell by 1.0% in February, a significant deceleration of deflation compared to the 1.7% in January, but non-food prices, although less deflationary in February (a 1.8% price decline compared to 2.3% in January), are still falling considerably faster than the overall index.

Helen Dickinson OBE, chief executive of the British Retail Consortium, said: “For the time being, consumers continue to benefit from an annual fall in non-food prices, which were down 1.8% on the previous year. However, the rate of deflation has eased considerably from a monthly perspective, which can be explained in part by an end to the promotional activity in January, after a weak festive sales performance in some non-food categories. Looking further ahead, retailers, who operate in a highly competitive market with narrow margins, will be increasingly hard pushed to protect their customers from the inevitable impact of rising cost pressures. We can therefore expect this impact to start manifesting in shop prices over the course of the year.”

Mike Watkins, head of retailer and business insight at Nielsen, said: “Non-food prices remain deflationary and in part this reflects the structural change underway in non-food retailing. At the moment consumer sentiment around spending intentions is strong so we don’t anticipate any significant change on retail spend over the next few months even if shop price inflation gains more momentum.”

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