UK shop prices fall by most in nearly two years - BRC

FILE PHOTO: A shopper walks past a high street store that is closing down in Worthing, February 21, 2020. REUTERS/Russell Boyce

LONDON (Reuters) - Prices on the British high street fell at their fastest pace in nearly two years in early March and they are likely to be pulled in different directions soon by the coronavirus crisis, an industry group said on Wednesday.

Shop prices fell by 0.8% in annual terms in the first week of the month, the biggest fall since May 2018, following a 0.6% drop in the same period in February, the British Retail Consortium trade body and market research firm Nielsen said.

“There are a number of price pressures arising from the coronavirus crisis,” BRC Chief Executive Helen Dickinson said.

“Food prices, particularly of fresh produce, may be impacted by higher costs on seasonal farm labour, while non-food prices will be pushed down by lower demand.”

In early March, food prices rose by an annual 1.1%, less than February’s rise, while non-food prices fell by 1.9%, matching their fall a month earlier.

Industry data published on Tuesday showed grocery sales leapt more than a fifth to a record 10.8 billion pounds in the four weeks to March 22 before the government ordered people to stay home as much as possible to slow the spread of coronavirus.

Writing by William Schomberg, editing by Andy Bruce