Last month shop prices hit the deepest deflation rate since records began, according to the BRC-Nielsen Shop Price Index.
Shop prices hit deflation for the 23rd consecutive month, accelerating to 2.1% in March, from 1.7% in February.
BRC director general Helen Dickinson, said: “Prices in Britain’s shops reached another new low, this month by -2.1 per cent. That’s the deepest deflation rate since our records began in December 2006. Food prices saw a further drop, largely as a result of promotions for fresh food, whilst non-food prices fell at a faster rate than last month, hitting a 24th consecutive month of deflation.
“Clothing and electricals continue to outshine by offering consumers eye-catching bargains. In fact, there’s evidence of plenty of promotions and price-cuts in non-food items, which should help drive up sales at a time when retailers are turning their attention to the Summer ranges.
“Both retailers and consumers will cheer on a hat-trick of good economic news. The Consumer price index (CPI) has fallen to zero for the first time on record, boosting incomes in real terms and bringing the UK to the brink of a spell of deflation that is expected in the coming months. That fall is largely the result of a deep oil price slump (down 49% on a year ago) and the continuing fierce competition among supermarkets that have dropped fuel and food prices over the year.
“Consumer confidence has also soared to a near 13-year high. With strong consumer confidence and relatively benign macro-economic conditions, we can expect the nation to respond with their feet or with a mouse click in the coming weeks.”
Nielsen head of retailer and business insight Mike Watkins said: “Prices continue to fall across the retail industry and deflation is likely to be with us for the near future, which means shoppers are going to be able to stretch their budgets further when shopping in store or online. For many high street fashion, home and outdoor retailers, lower prices are being backed up by attractive promotions which comes at good time as momentum builds in selling late Spring and early Summer ranges.”