Shop prices return to inflation
Shop price inflation increased to 0.4% year-on-year in June following a decline of 0.1% in May as retailers faced higher costs following the impact of the Autumn Budget.
According to the British Retail Consortium’s Shop Price Index, food inflation rose sharply to 3.7% against May’s growth of 2.8% as hot, dry weather led to a decline in harvest yields for fruit and vegetables.
Subscribe to TRBHelen Dickinson, chief executive of the BRC, said: “Within three months of the costs imposed by last autumn’s budget kicking in, headline shop prices have returned to inflation for the first time in close to a year.
“Food inflation showed little sign of slowing down, particularly in fresh produce, where prices of meat have been impacted by high wholesale prices and more expensive labour costs.
“Meanwhile, fruit and vegetable prices increased due to the hot, dry weather reducing harvest yields.”
Non-food inflation increased to -1.2% year-on-year in June against a decline of -1.5% in May as retailers cut prices across various categories, especially DIY and gardening.
Dickinson added: “Retailers have warned of higher prices for consumers since last year’s Autumn Budget and the huge rises to Employer National Insurance costs and the National Living Wage.
“To limit further rises, Government must find ways to alleviate the cost pressures bearing down on retailers. The upcoming business rates reform offers such an opportunity, and the Government must ensure no shop pays more as a result of the changes.”
