No end in sight for shop price deflation
UK shop prices fell by 1.8% in May from a 1.7% decline in April. The drop means that prices have now been falling for more than three years.
Figures from the BRC-Nielsen monthly shop price index show that non-food prices declined by 2.7%.
Meanwhile, food prices moved back into deflationary territory with a 0.3% fall. This was driven by a 0.8% decline in fresh food prices.
Ambient food inflation fell back to 0.4% in May after accelerating sharply in April to 1%.
BRC chief executive Helen Dickinson said: “We’ve experienced a record run of falling shop prices and, for the time being, there’s little to suggest that’ll end any time soon.
“Looking slightly longer term we know that the recent commodity price increases will start to put pressure on retailers to raise their own prices. We would normally expect these input costs to filter through to prices eventually, but the big question is how far fierce competition in the industry will insulate consumers from price increases.”
