Shop price inflation quickened in May, says BRC
Figures released by the British Retail Consortium and Nielsen today show that shop price inflation stepped up in May as retailers struggled to maintain discounts to attract cash-strapped consumers.
Overall shop price inflation increased to 1.5% from 1.3% in April while food inflation held steady at 4.3% for the second consecutive month. Deflation in non-food slowed to 0.1% from 0.5% in April.
BRC director general Stephen Robertson said: "Some prices are moving upwards as retailers struggle to maintain the margin-sapping discounts which reached unsustainable levels in the face of weak consumer spending.
"Easing commodity prices helped combat rising property and distribution costs. There’s still a possibility of future supply shocks but the outlook for inflation looks set to remain at modest levels."
Mike Watkins, senior manager, retailer services, Nielsen added: "With the summer of events and celebration now under way, and after a couple of months of weak sales, marketing programmes and promotions have been ramped up by retailers. Although the overall level of food inflation remains unchanged, the underlying ambient inflation is the lowest since January which is good news for the consumer.
"The stabilisation of food prices is providing a welcome respite. There are also some other savings for shoppers with many supermarkets continuing to offer fuel discounts or cash savings on future shopping at the checkout."
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