Shop prices are holding stable despite global supply chain instability, reports Harvir Dhillon, economist at the British Retail Consortium (BRC), responding to the latest CPI inflation figures which show headline inflation holding steady at 2.8% and food inflation falling to 2.2% in May.
Furniture, household equipment and maintenance prices fell to -0.1% in the ONS Consumer Price Index in May, down from 0.5% in April.
“Headline inflation remained unchanged, as supermarkets cut prices for both food and drink," says Harvir. "Food inflation eased to 2.2% – its lowest since the 2024 Autumn Budget – thanks to fierce competition between grocers. However, it will likely pick up over the coming months as input costs rise, following the conflict in Iran.
"Elsewhere, prices at the fuel pump are likely to have peaked, and are expected to fall further over the coming months. A 12.7% increase in energy bills next month will, however, add further upward pressure on prices.
“Retailers are already shouldering a heavy burden of costs, from higher National Insurance contributions and the triple packaging tax to supply chain disruption triggered by the Iran conflict. To ensure prices can remain competitive for consumers in the long term, the Government must take pragmatic steps to reduce the cost of doing business. This should start with a reduction in non-commodity charges, which are driving high energy bills, allowing retailers the breathing space to deliver savings for their customers.”
