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Retailers

Pressure mounts on retailers as shop prices continue to fall

Overall shop prices reported deflation of 1.8% in May from the 1.7% decline in April, according to the latest British Retail Consortium (BRC) and Nielsen Shop Price Index.

Non-food deflation slowed to 2.7% from 2.9% in April, which is in line with the 12-month average, while food prices moved back into deflationary territory during the month as it continues to fluctuate around the 0% mark.

Helen Dickinson, chief executive at the BRC, said: “The fact that today’s figures remain deflationary doesn’t come as a great surprise. 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 – so the good news for consumers continues.

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“Indeed, with food prices remaining flat at the same time as wages continue to grow means customers will have yet more money in their pockets at the end of their weekly shop.

“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.”

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