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Lowest food inflation for fourteen months

The BRC-Nielsen Shop Price Index reported annual inflation of 0.7% in June, from 1.3% in May, this marks the third consecutive month inflation has slowed.

GENERAL MERCHANDISE

Lowest food inflation for fourteen months

The BRC-Nielsen Shop Price Index reported annual inflation of 0.7% in June, from 1.3% in May, this marks the third consecutive month inflation has slowed.

Overall shop price inflation was driven by food which reported annual inflation of 5.6%, from 6.4% in May. Non-food deflation increased further to 1.9% in June, from 1.3% reported in May. On a month-on-month basis prices i
ncreased by 0.2% in June from May's 0.5% increase.

The BRC's Director General, Stephen Robertson, said: “Food inflation is now the lowest it's been for 14 months. That's largely because of falling fresh food inflation, particularly for dairy products and some meats.

"The pound's recent revival is easing the cost of imports and overseas demand for UK produce. Oil prices are up since the start of the year - but are half their peak last July. Food inflation is likely to keep falling. “Overall shop price inflation is the lowest since last December. Non-food prices have been cheaper than a year ago every month since then - with the biggest drops in clothing, footwear and electricals.

“With unemployment going up, consumer confidence continues to be fragile. Retailers have reacted by offering widespread discounts and promotions - usually at the expense of their own margins. The Government must play its part by removing unnecessary burdens - allowing retailers to help hard-pressed customers and sustain retail jobs.”

Mike Watkins, Senior Manager, Retailer Services, Nielsen added: "Shoppers are now seeing more savings on their supermarket till receipts as food inflation continues to slow, with the falls in fresh food inflation being most obvious. Weak consumer confidence has led to promotional activity being higher in both non-food and food compared with this time last year but the recent good weather has certainly helped shoppers spend again and take advantage of these promotions.“

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