Published on 5 - May - 2010
Shop price inflation jumps in April as Easter discounts expireOverall shop price inflation rose to 2% last month, as seasonal promotions come to an end and commodity prices soar.
The increase from 1.2% in March included a jump in non-food inflation to 2% in April from 1.3% the previous month. Food inflation, which saw a three-year low in March at 1.2% was also up to 2% last month, according to the BRC-Nielson Shop Price Index for April 2010.
However, British Retail Consortium director general Stephen Robertson stressed that inflation is not continuing in an upward trend and retailers can expect to see some stability in future months: "Rising costs edged overall shop price inflation up, but it's still below the rates seen in December and January. With commodity prices, including oil and cocoa going up, food prices were almost bound to rise when compared with last month's three-year low. Even so, food inflation is a quarter of what it was this time last year."
He added that the surge in price of oil, which is up 70% over the year, also influenced some non-food prices, driving up manufacturing and transport costs, while VAT is also higher than a year ago.
Mr Robertson concluded that, "the main effects of rising costs and the weak pound have now been felt. With demand still weak, shop prices should be more stable in future months, as long as there are no more big shocks."
Nielsen senior manager, retailer services, Mike Watkins explained that the April Shop Price Index reflects the end of a number of seasonal and Easter discounts. He added: "Whilst some inflationary cost price pressure remains in the background... we still have a low growth environment. Retailers across all channels continue to rely on promotions, deep discounts and a range of initiatives to drive loyalty and sales as shopper demand remains unpredictable."
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