According to the British Retail Consortium (BRC), the U.K. shop prices declined by 1.7% year-on-year in March, after a 2.0% decline in February.

The decline was mainly driven by a drop in non-food prices, which plunged 2.6% year-on-year in March.

Food prices declined at an annual rate of 0.4% in March, driven mainly by reductions in fresh food.

"March was the 36th month in which consumers have benefited from falling prices. March also marked the 35th month of falling overall prices," BRC Chief Executive, Helen Dickinson, said.

"Despite consumer confidence remaining at zero, a relatively benign economic environment (inflation remains very low and oil is trading at just under $40 per barrel) and a fiercely competitive market will see retailers continue to respond to their customers with prices and promotions to maintain market share as the Spring season kicks off," she added.