Shop prices fell by -0.6% YoY in May, reports BRC-NielsenIQ – a slower decline than April’s decrease of -1.3%, and the slowest rate of decline since February 2020.
Non-food deflation continued to slow in May, with prices falling by -0.8% compared to a decline of -1.7% in April – the slowest rate of decline since May 2019.
BRC chief executive Helen Dickinson OBE says: “It was another good month for consumers looking for bargains as prices fell again, albeit at a slower pace than last month. While clothing and footwear prices continued to fall in May, the pick-up in demand once social restrictions lifted meant this drop was smaller than in previous months. Furniture and electricals saw prices rise as retailers felt the lingering impact of global supply chain disruption from earlier this year. Meanwhile, supermarkets fought hard to maintain market share and please thrifty customers by keeping prices low.
“However, cost pressures are bearing down. Global food prices are currently at their highest in seven years, shipping costs have risen threefold since 2019, and commodity prices are climbing. We will likely see these costs filter through in the second half of this year, and with the additional Brexit red tape this autumn, retailers may be forced to pass on some of these costs onto their customers. Government can help to ease the burden on British consumers by finding ways to minimise the impact of new checks and documentation required from October.”