Between January and February, overall shop prices increased by 0.29 per cent, after showing a fall of 0.62 per cent between December and January. Non-food prices were the main factor behind the month-on-month increase, with the non-food index rising by 0.48 per cent from January to February, after falling by 1.13 per cent between December and January. For the first time in almost a year, the food index showed a month-on-month fall, decreasing by 0.09 per cent from January, suggesting food price inflation is easing.
After easing off in January, February's SPI indicated that overall high street inflation had slowed further, with overall prices 1.79 per cent higher than a year ago, compared with a rise of 1.84 per cent in January and 2.28 per cent in December.
Despite this fall in the inflation rate, February is the eighth consecutive month to show a year-on-year increase. The main factor driving this continues to be food, because of varying commodity prices and greater seasonal fluctuations.
The rate for food now stands at 5.18 per cent, down slightly from 5.36 per cent in January. However, non-food is up only 0.19 per cent, only a slight increase from 0.17 per cent the month before and an indication of the small amount of upward pressure that non-food items have on shop prices.
BRC director-general Kevin Hawkins said: 'Food inflation is continuing to fall and non-food prices have hardly changed since this time last year. While the overall change in retail prices has been gradual, it is essential that the disinflationary effects of the recent increases in interest rates are given time to work through.'
Despite these increases, the SPI remains significantly lower than the official Government measures of inflation, emphasising once again that there is still little inflationary pressure coming from the high street.
ACNielsen Senior Manager, Retailer Services, Mike Watkins said: 'Post Christmas most food retailers continue to see strong consumer demand. And this is translating into good sales growths most notably in premium food and general merchandise. Nevertheless if food price inflation does ease over the next few months and if sales also begin to slow, retailers may need to compensate with extra promotions and deeper price cuts which is something that non food retailers have had to execute for some months now.'