Falling prices of chocolate and jams slow food inflation | Top Vip News

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  • By Jemma Dempsey
  • Business reporter, BBC News

Image source, fake images

Falling prices for chocolate, sugar and jams helped food price inflation slow to its lowest level in more than two years, according to new industry figures.

Competition between retailers pushed down prices on some products in March, but Easter treats were more expensive, the British Retail Consortium (BRC) said.

It said the overall rate of price growth had almost halved to 1.3%, down from 2.5% in February.

Food price inflation has fallen for 10 consecutive months.

But overall, food prices are 3.7% higher than a year ago, up from 5% in February, the BRC said.

The BRC said retailers had competed “fiercely” on deals, especially in the run-up to Easter.

Prices of dairy products and chocolate fell in March, while prices of electrical appliances, clothing and footwear also fell as a result of promotions.

“While Easter sweets were more expensive than in previous years due to high global cocoa and sugar prices, retailers offered great deals on popular chocolates, leading to price drops compared to the previous month,” he said. Helen Dickinson, BRC CEO.

Non-food retail inflation fell to 0.2% in March, down from 1.3% the previous month. Headline inflation, the general rate at which prices rise and the measure used to assess the cost of living, currently stands at 3.4% in the UK.

However, Ms Dickinson told the BBC’s Today program that although high commodity prices caused by global crises had largely eased, consumers should not expect to see a return to previous prices. to the pandemic.

“We won’t see significant falls in prices back to pre-Covid levels; doing that would require deflation the likes of which we haven’t seen since the Great Depression (of the 1930s),” he said.

Other costs associated with wages, energy and other raw materials were “built in”, which Dickinson said could threaten the downward inflationary trend, along with changes to post-Brexit regulations and border controls.

“These costs include a 6.7% business rates rise, poorly thought-out recycling proposals and new border controls – all at the same time as the biggest increase in the national living wage on record,” he said. “Risks are bullish as we move into the second quarter of the year.”

The government’s minimum wage, known as the National Living Wage, has risen by more than £1 for the first time, providing a boost to 2.7 million low-paid workers.

The wage increased on April 1 from £10.42 to £11.44 for those aged 21 and over.

In preparation for the new minimum wage, many supermarkets including Tesco, Sainsbury’s, Asda, Aldi, Lidl and M&S have increased the pay of staff outside London to £12 an hour, and competition to attract staff remains fierce.

“The job market is still very tight, there are still over 100,000 vacancies across the retail industry and that’s not just within the stores, but also at head offices, within distribution,” Ms Dickinson told the BBC. .

“That will keep the impact of labor costs higher than it would have been on prices for consumers.”

Mike Watkins, head of retail and business at Insight, NielsenIQ, which also compiled the BRC report, said the drop in food price inflation was “to be expected”.

It said this was “helped by intense competition between supermarkets looking to drive footfall, with targeted price cuts and promotional offers at the start of the month for Mother’s Day and now again in the weeks leading up to Easter”.

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