By Daniel Hunter

Overall shop price inflation rose to 1.4% in March from 1.1% in February. Food inflation was unchanged at 3.5% in March. Non-food inflation rose 0.2% in March compared with a 0.4% fall in February, the highest rate and the first positive figure in 15 months.

Helen Dickinson, British Retail Consortium Director General, said: "Non-food prices have edged into inflationary territory for the first time in 15 months, driven by gradual growth across a number of categories rather than any one seeing a substantial increase. It bears out anecdotal evidence that demand is strengthening and promotions are less widespread than last year.

"Food inflation is unchanged since February, but this is primarily due to a decrease in prices for tinned and packet goods balancing out a fresh food rise. There are still price pressures which will continue to work through, but I would expect food inflation to remain fairly steady in the medium term.

"Total inflation is at its highest rate since December, again reflecting that many retailers went into the New Year with less stock to clear so discounting is less extensive compared with 2012. Next month will be the ‘one to watch'. It'll be interesting to see if the prolonged unseasonably cold and wet weather leads to deeper discounting on Spring lines for some retailers."

Mike Watkins, Head of Retailer and Business Insight, Nielsen said: "With cold weather in March holding back spending across many channels, price reductions have been needed to stimulate demand for food and there was also an increase in price competition at the supermarkets due to Easter promotions, keeping overall food inflation stable. As discretionary spend for the next few months is expected to remain flat at best, what upward pressure there is on prices is not coming from the consumer at the moment."

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