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Press Release

Shop price inflation edges up

5 May 2010

Overall shop price inflation rose to 2.0% in April from 1.2% in March. Food inflation rose to 2.0% in April from 1.2% in March. Non-food inflation rose to 2.0% in April from 1.3% in March.

Stephen Robertson, British Retail Consortium Director General, said:

"Rising costs edged overall shop price inflation up, but it's still below the rates seen in December and January.

"With commodity prices, including oil and cocoa going up, food prices were almost bound to rise when compared with last month's three-year low.

"Even so, food inflation is a quarter of what it was this time last year while some produce - milk, cheese and eggs - is actually cheaper than 2009.

"Oil, which is up 70 per cent over the year, also influenced some non-food prices as manufacturing and transport costs went up. VAT is also higher than a year ago.

"But the main effects of rising costs and the weak pound have now been felt. With demand still weak, shop prices should be more stable in future months, as long as there are no more big shocks."

Mike Watkins, Senior Manager, Retailer Services, Nielsen comments:

"The Shop Price Index this month reflects the end of some seasonal and Easter discounts and, for food retailers, this also comes after the lowest inflation for three years. Whilst some inflationary cost price pressure remains in the background in particular for food, we still have a low growth environment. Retailers across all channels continue to rely on promotions, deep discounts and a range of initiatives to drive loyalty and sales as shopper demand remains unpredictable."

Shop price index April 2010

http://www.brc.org.uk/showDoc04.asp?id=4086&moid=6971



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