Food prices climbed 0.4% last month as the slumped value of the pound and increased import costs started to impact grocery bills.
This marks the first inflationary increase in food prices since April last year and contrasts sharply with the 0.8% drop registered in January.
According to the British Retail Consortium (BRC) and Nielsen shop price index for February, the price of fresh food edged up 0.1% and ambient food prices climbed 0.8%, compared with a 0.2% drop the month before.
BRC chief executive Helen Dickinson said: “Global food prices were on average 16% higher at the beginning of this year compared to last, whilst over the same period the value of the pound fell around 15%.
“Despite this, February saw an increase of just 0.4% in the prices of food sold in shops; proving retailers’ resilience in managing to largely shield consumers from cost increases.”
Overall shop prices
Overall shop prices were 1% lower than the same month last year.
Dickinson said that while this continued a trend of year-on-year price falls that has lasted nearly four years, “it is clear that the significant underlying cost pressures, which have been building over the last year, are beginning to filter through into shop prices”.
The cost of non-food items declined 0.8% – an easing from the 2.3% drop the previous month.
Year-on-year, non-food items deflated 1.8%.
The price of clothing and footwear deflated 5.8% year-on-year and the cost of furniture declined 1.9%.
“For the time being, consumers continue to benefit from an annual fall in non-food prices, which were down 1.8% on the previous year.
“However, the rate of deflation has eased considerably from a monthly perspective, which can be explained in part by an end to the promotional activity in January, after a weak festive sales performance in some non-food categories,” Dickinson said.
“Looking further ahead, retailers, who operate in a highly competitive market with narrow margins will be increasingly hard pushed to protect their customers from the inevitable impact of these rising cost pressures. We can therefore expect this impact to start manifesting in shop prices over the course of the year,” Dickinson said.
Nielsen head of retailer and business insight Mike Watkins added: “Non-food prices remain deflationary and in part this reflects the structural change underway in non-food retailing.
”At the moment consumer sentiment around spending intentions is strong so we don’t anticipate any significant change on retail spend over the next few months even if shop price inflation gains more momentum.”