Shop price deflation continued to ease in July, prices falling by 0.3 percent from June’s deflation of 0.5 percent, according to BRC – Nielsen Shop Price Index.
This is the 63rd month of shop price deflation and the lowest rate since December 2017.
Non-food deflation lessened to 1.4 percent in July from 1.6 percent in June. This is the lowest rate of deflation since December 2017.
Food prices increased in July, with vegetables and fruit affected in particular. Inflation accelerated to 1.6 percent in July from the 1.2 percent rate of June and May.
“We expect this period of food price inflation to continue in coming months as – despite global oil, food and commodities prices shrinking recently – the hot, dry conditions we have seen across the northern hemisphere means the pressure on prices will continue for some time to come, ” said Helen Dickinson OBE, Chief Executive, British Retail Consortium.
“These global pressures on food prices in particular are yet further demonstration of the need for an agreement on the backstop to ensure frictionless trade is maintained after the 29 March 2019 if retailers are to maintain value and choice for consumers,” Dickinson added.
Fresh Food inflation picked up in July, Fresh Food prices increasing by 1.2 percent in July from 0.8 percent in June.
Ambient Food inflation sped up to 2.2 percent in July from 1.6 percent in June.
Mike Watkins, Head of Retailer and Business Insight at Nielsen, commented: “The slight increase in food inflation over the early summer has been offset by increased demand for food and drink as the result of the heatwave and incremental spend around the World Cup.
“On the non-food high street, retailers are maintaining the level and depth of price cuts and promotions to help drive footfall over the holiday period. Looking ahead, with weather related changes in commodity markets anticipated, fluctuating currencies and wavering consumer spending, retailers still need to minimise price increases, as the underlying trading conditions across the retail industry remain challenging.”