UK shop price inflation accelerates in May

Shop price inflation
// Shop price inflation has accelerated in May to 0.8% from 0.4% in April
// Non-food prices rose 0.2% compared to a 0.6% decrease in April
// Food inflation continued to decelerate in May to 1.8% from 2.2% in April
// Shop price inflation driven by non-food prices, mainly in furniture and health & beauty

UK shop prices have increased in May, reaching the second highest growth rate in the last six years.

Shop price inflation accelerated to 0.8 per cent from 0.4 per cent in April, placing it above the 12 and six month average price increases of 0.2 per cent and 0.6 per cent respectively, according to figures from the BRC and Nielsen.

Non-food prices rose 0.2 per cent compared to a 0.6 per cent decrease in April, making it the second month of non-food inflation in 2019, in contrast to the past six years of deflation.

Meanwhile, food inflation continued to decelerate in May to 1.8 per cent from 2.2 per cent in April, while fresh food inflation remained flat at 1.5 per cent in May with ambient food inflation down to 2.1 per cent from 3.2 per cent in April.

Shop price inflation in May was driven by the growth in non-food prices, mainly in sectors such as furniture and health & beauty, adjusting their prices to their 2015/2016 levels after years of heavy discounting.

Furniture prices in May were 6.5 per cent higher compared to the same period last year.

“Shop Price growth in May was the second highest rate in the last six years, though it remains well below headline inflation,” BRC chief executive Helen Dickinson said.

“Rising costs associated with currency depreciation, stockpiling, rising minimum wage and the Apprenticeship Levy, have all put upwards pressure on prices for a while, and it now appears that retailers cannot absorb them any longer.

“Unless the government addresses future cost rises, including spiralling business rates, we may see larger price rises in the future,” she said.

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