Shop price inflation eased in April as retailers increased promotions across clothing, furniture, DIY and Easter food ranges to encourage spending amid weakening consumer confidence.

The latest BRC-NIQ Shop Price Index showed shop prices rose 1.0 per cent year on year in April, down from 1.2 per cent in March and below the three-month average of 1.1 per cent.

Food inflation also slowed, falling to 3.1 per cent from 3.4 per cent the previous month, below the three-month average of 3.3 per cent.

Fresh food inflation dropped from 4.4 per cent in March to 3.9 per cent in April, while ambient food inflation edged up slightly to 2.1 per cent, from 2.0 per cent.

Non-food prices returned to deflation, falling 0.1 per cent year on year in April after rising 0.1 per cent in March.

On a month-on-month basis, overall shop prices fell 0.2 per cent in April, while non-food prices dropped 0.6 per cent. Food prices rose 0.5 per cent over the month.

BRC chief executive Helen Dickinson said: “Bigger discounts in clothing, furniture and DIY goods helped pull down shop price inflation in April. With weakening consumer confidence, retailers competed harder on price to stimulate more spring spending.

“Food price inflation also slowed as retailers offered discounts on Easter items such as chocolate. While we’re yet to see the full force of the Middle East conflict feeding into consumer prices, it will not be long before it begins to.”

Dickinson warned that retailers were already facing mounting cost pressures from domestic policy changes, with £10bn a year added over the past two years through employment costs, packaging taxes and other measures.

She said these pressures would be compounded as rising fuel, fertiliser and commodity prices begin to feed through into business costs.

“Government can help moderate shop price inflation by fixing the non-commodity charges which inflate businesses’ energy bills,” Dickinson said.

“This could help mitigate the peak in food inflation, reducing the squeeze on struggling households who will ultimately bear the brunt.”

NIQ head of retailer and business insight Mike Watkins said higher fuel prices were already contributing to inflationary pressure.

“Increased fuel prices are already leading to higher inflation, and we can expect a similar impact in the food and non-food supply chains in the months to come,” he said.

“However, retailers will look to hold back any price increases as long as possible as alongside fragile consumer confidence, accelerating inflation is likely to negatively affect consumer spending.”

The figures suggest grocery retailers are continuing to absorb and offset cost pressures where possible, but the sector remains exposed to rising supply chain costs and weaker household confidence in the months ahead.

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