BRC-NielsenIQ: Nonfood Price Disinflation Continues

BRC-NielsenIQ Shop Price inflation slowed to +0.8% Y/Y in April (vs +1.3% Y/Y prior), whilst Shop Price Inflation fell on a monthly basis by 0.3% M/M (vs 0.4% M/M decline in March) for the second consecutive month.

• The trend of disinflation remains although it is now driven by the Non-Food component (rather than the Food component), which saw a fall in prices for the first time since December 2021 by 0.6% Y/Y from +0.2% Y/Y in March. Meanwhile, Food Prices also continued to slow although at a slower pace to +3.40% (vs +3.70% Y/Y prior) - the twelfth consecutive monthly fall.
• Despite food price inflation being the lowest since March 2022, on a monthly basis it has risen +0.5% M/M (vs -0.3% M/M prior). The monthly increase may be due to possible Easter effects given the survey period began on the Easter Monday bank holiday. Therefore, the trend may be distorted from what ONS will reflect given the ONS collection period doesn't occur on weeks beginning with bank holidays, and hence will have a different survey period, further away from any Easter distortions.
• The most concerning inflationary aspect for the MPC at the moment is sticky services price inflation which isn't picked up in this survey. However, there will be some encouragement surrounding the progress this data displays for nonfood inflation (which will primarily be NEIG), as shown in the chart below where the downtrend in Y/Y nonfood inflation is showing little sign of slowing. However, any stalling in food price disinflation will be a concern. It is still too early to draw too much of a conclusion from this data, but there do appear to be signs of food price disinflation beginning to plateau.
• Survey period: 1 to 7 April 2024.