Price rises in UK shops have slowed as retailers applied “heavy discounting” to their goods in an effort to entice shoppers amid weakening consumer confidence, the industry’s trade group said.

Shop price inflation rose by 1% year-on-year in April, a slowdown from 1.2% in March and below the three-month average of 1.1%, according to the British Retail Consortium (BRC).

Retailers made discounts to clothing, furniture and DIY goods, the BRC said in its monthly survey of its members, compiled with NielsenIQ (NIQ).

Inflation for non-food items decreased to -0.1% year-on-year in April, against growth of 0.1% in March. This is below the three-month average of 0%.

Recent surveys have shown households are becoming more cautious around spending as they brace for a fresh cost of living shock due to rising energy and food costs as a result of the Iran war.

At the weekend, the chief secretary to the prime minister, Darren Jones, warned that the UK faces higher prices for food and fuel for at least eight months after the war in Iran ends.

UK inflation increased to 3.3% in March, according to official figures released last week, up from 3% in February. A survey from the data company GfK showed UK consumer confidence slid in April to its lowest level since October 2023.

Helen Dickinson, the chief executive of the BRC, said: “With weakening consumer confidence, retailers competed harder on price to stimulate more spring spending.”

However, she added: “While we’re yet to see the full force of the Middle East conflict feeding into consumer prices, it will not be long before it begins to.”

A separate survey of retailers by the Confederation of British Industry (CBI) found that sales volumes were “below seasonal norms in April” and are expected to also be poor in May.

The CBI survey said a net balance of 68% of retailers said volumes had fallen in the year to April, up from 52% in March, representing the lowest reading since the survey began in 1983.

Meanwhile, online retail sales volumes dropped at the fastest rate since January 2024, while wholesalers also reported falls.

Martin Sartorius, the lead economist at the CBI, said: “Retail conditions deteriorated in April, with sales momentum weakening noticeably against a backdrop of fragile consumer confidence. Activity remained subdued in the wholesale sector, with firms reporting headwinds from high costs and muted demand.”

The BRC said food price inflation fell to 3.1% year-on-year in April, from 3.4% in March, as retailers offered discounts on Easter items including chocolate. Price rises for fresh food slowed significantly to 3.9%, from 4.4% in March and below the three-month average of 4.2%.

The slowdown is unlikely to last for long, however. Mike Watkins, the head of retailer and business insight at NIQ, said increased fuel prices are already leading to higher inflation, and the UK should expect to see a similar impact in the food and non-food supply chains in the months to come.

The BRC called on the government to moderate shop price inflation by fixing the price of so-called ‘non-commodity charges’, which are the other costs aside from electricity or gas that together make up around half of the average business energy bill in the UK.