Retailers continued to do all they could to protect customers from the cost pressures bearing down on the industry, says the British Retail Consortium (BRC).

According to the latest BRC-NIQ Shop Price Index, shop price inflation increased to -0.4% year on year in March, against a decline of -0.7% in February. This is above the 3-month average of -0.6%.

Non-Food inflation increased to -1.9% year on year in March, against a decline of -2.1% in February. This is in line with the 3-month average of -1.9%.

Food inflation increased to 2.4% year on year in March, against growth of 2.1% in February. This is above the 3-month average of 2.0%.

Helen Dickinson, Chief Executive of the BRC, said: “Prices fell for most non-food categories, which kept year-on-year overall shop prices in deflation, but at a reduced rate compared to February. Clothing and footwear was in double digit deflation as a result of weak consumer demand. Across food, price inflation rose year-on-year, with ambient food seeing the highest increase. For example, alcoholic and non-alcoholic beverages both saw price increases due to changes to duties and the hangover from high global sugar prices.

“With retailers bracing for significant extra costs which kick in later this week as a result of the Budget, inflation will likely accelerate in the coming months. Along with new packaging taxes later this year, retailers will be shouldering an additional £7bn in costs. It is crucial that the Employment Rights Bill and business rates reform don’t further inflate costs and increase red tape.”

Mike Watkins, Head of Retailer and Business Insight, NielsenIQ, said: “There is competition on the high street as retailers look to pull in reluctant shoppers with seasonal promotions. However, with upwards pressure on prices, retailers may also need some focussed price cuts to help footfall in the run up to the late Easter.”