The BRC-Nielsen Shop Price Index is a monthly measure of UK shop price inflation. The SPI measures changes in the price of 500 of the most commonly bought items. The report demonstrates the extent to which retailers contribute to inflation through the pricing of commonly bought goods. Here are the key findings for April 2021:
Summary:
- Shop Prices fell by 1.3% in April, a slower decline than the 2.4% decrease seen in March. This is above the 12- and 6-month average price decreases of 1.8% and 2.0%, respectively.
- Non-Food deflation slowed significantly to 1.7% in April, compared to a decline of 4.0% in March. This is the slowest rate of decline since January 2020. This is above the 12- and 6-month average price declines of 3.4% and 3.4%, respectively.
- Food prices fell by 0.6% in April, down from a rise of 0.3% in March. This is below the 12- and 6-month average price increases of 0.8% and 0.3%, respectively. This is the first time that Food prices are deflationary since January 2017.
- Fresh Food prices fell for the fifth consecutive month in April. Fresh food deflation accelerated to 1.5% in April from a decline of 0.8% in March. This is below the 12- and 6-month average price growth rates of -0.1% and -0.7%, respectively.
- Ambient Food inflation slowed to 0.6% in April, down from 1.7% in March. This is below the 12- and 6-month average price increases of 2.2% and 1.8%, respectively. This is the lowest rate of inflation since March 2018.
Commentary:
Helen Dickinson OBE, Chief Executive, British Retail Consortium, said:
“Prices fell in April year-on-year for both Non-Food and Food. The decline in food prices was the result of fewer promotions in the comparison period, April 2020, as retailers tried to deter shoppers from stockpiling before and during the first lockdown. Non-Food deflation continued, with retailers discounting goods, particularly on last season’s stock as they made way for the latest products ahead of re-opening. However, some products, such as furniture saw prices generally rise due to the combination of high demand and disruption to global supply chains.
“Falling prices are unlikely to last; in the months ahead retailers will have to battle the cost pressures from Brexit red-tape, rising shipping costs due to international supply issues, as well as increasing global food and oil prices. As these costs filter through, retailers may be left with no option but to pass on some of these costs to consumers. The Government can help to relieve this pressure by ensuring that the new checks and documentation requirements this autumn avoid adding further friction to the import of goods.”
Mike Watkins, Head of Retailer and Business Insight, NielsenIQ:
“With the economy reopening we will start to see a rebalancing of consumer spend and it’s good news that there is still shop price deflation. Looking ahead, with many households uncertain about their personal finances, if external cost pressures start to feed through then shoppers may become more price sensitive over the next few months, as lifestyles are adapted to a new normal.”
As a member of the BRC, the MIA can share the full report with our members. If you would like to see the full report, please contact alice@mia.org.uk
