Shop prices have turned deflationary for the first time since October 2018, according to the latest figures from the British Retail Consortium (BRC)-Nielsen Shop Price Index.
In June, shop prices fell by 0.1%, compared with May when prices increased by 0.8%. This is below the 12- and six-month average price increases of 0.3% and 0.5%, respectively.
Non-food prices were back in deflationary territory in June, recording a decrease of 1.2% from the 0.2% increase in May. This is below the 12- and six-month average price decline of 0.6 and 0.3%, respectively.
Additionally, the BRC said shoppers’ finances have been under “significant strains”. Real income grew by just 1.1% over the year to April 2019, whereas there was negative real wage growth in six of the last nine years.
Helen Dickinson, CEO of the BRC, said: “Shop prices fell for the first time since October 2018. While the overall fall in prices was small, and food inflation remains steady, it nonetheless represents a welcome break for consumers after several months of inflation. It is also a sign of the fierce competition between retailers, which has long kept prices low for British consumers.
“However, a no deal Brexit would hinder retailers’ abilities to continue to contain prices, as checks and delays would raise the cost of doing business. The October 31st deadline also comes at the worst possible time for retail – the height of preparations for Christmas and Black Friday, which are peak trading periods, threatening to cause disruption for consumers and businesses, and making further stockpiling of goods almost impossible. It is vital that the next Prime Minister reaches a deal with the EU and avoids the cliff edge.”