The British Retail Consortium (BRC) and Nielson Shop Price Index (SPI) for March 2016 indicates that overall shop prices reported a deflation of 1.7% in March from the 2% decline in February, with non-food deflation rising to 2.6% in March from the 3% fall in February.
The SPI is administered by Nielsen, which collates and analyses the data on behalf of the BRC, and the index provides an indicator of the direction of price changes in retail outlets.
Helen Dickinson OBE, chief executive of the BRC, comments: “This month shoppers can celebrate three years of falling non-food prices. While non-food deflation slowed to 2.6 per cent in March, lower than the 3.0 per cent reported over the last three months, March was the 36th month in which consumers have benefitted from falling prices. March also marked the 35th month of falling overall prices.
“Overall, shop prices fell by 1.7 per cent last month compared to March 2015 as a result of continuing intense competition and retailers ongoing investment in price.
“Despite consumer confidence remaining at zero, a relatively benign economic environment (inflation remains very low and oil is trading at just under $40 per barrel) and a fiercely competitive market will see retailers continue to respond to their customers with prices and promotions to maintain market share as the Spring season kicks off.”
Mike Watkins, head of retailer and business insight at Nielsen, comments: “Shoppers are still making changes to how they spend to stay within their household budget, and looking out for price cuts and promotions is one of the ways to save money. So with shop prices continuing to be lower than a year ago this is good news for shoppers. With Spring arriving, retailers will be hoping that this drives store traffic as so far this year, retail sales have been rather unpredictable.”
The BRC launched the SPI to give “an accurate picture of the inflation rate of 500 of the most commonly bought high street products in stores.”
Although it is a proxy measure of inflation, the SPI is more focused than the RPI, and demonstrates the extent to which retailers contribute to inflation through their pricing of a range of commonly bought goods.