In April, shop price inflation shifted to -0.1% from -0.4% in March, highlighting a departure from deflationary trends. Non-food items saw inflation rise to -1.4%, while food inflation increased to 2.6%. Increases in essential food items prices are noted alongside impending employment costs and packaging taxes. BRC's Helen Dickinson warns of rising prices due to these costs, while NielsenIQ's Mike Watkins suggests cautious consumer spending, potentially affected by rising supply chain costs despite lower inflation rates compared to the previous year.
The days of shop price deflation look numbered as food inflation rose to its highest in 11 months, and non-food deflation eased significantly.
Despite price competition heating up, retailers are unable to absorb the total impact of £5bn of employment costs and the additional £2bn costs when the new packaging tax comes into effect in October.
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