“Good news for shoppers” as July shop price deflation holds steady

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May footfall
// Shop price deflation steadies at 0.1 per cent for July
// BRC-Nielsen Shop Price Index finds low consumer confidence stopping shoppers from splashing out
// “Stiff competition” from retailers for deep discounts

The BRC-Nielsen Shop Price Index has revealed July’s Shop Price deflation came in at 0.1 per cent, in the second consecutive month of deflation since October 2018.

The index reported that the inflation was below the 12 and six-month average price increases of 0.3 per cent  and 0.4 per cent respectively. 

Food inflation eased slightly to 1.7 per cent in July from 1.8 per cent in June, with fresh food inflation slowing to 1.2 per cent in July from 1.4 per cent in June.

Meanwhile, the index shows that July’s headline inflation figure was driven by a sharp decline in non-food prices.

The results suggest low consumer confidence have kept shoppers from splashing out on discretionary items, and that retailers are favouring price discounts to attract customers.

“Shop prices fell by 0.1 per cent for the second month in a row,” BRC chief executive Helen Dickinson said.

“Many consumers will be pleased to see the price of non-food products continuing to fall at a steady rate, underlining the stiff competition between retailers that is driving down prices.

“Furthermore, food price inflation eased slightly, in part due to the fall in global food prices.

“While we expect food inflation to remain steady over the next few months as retailers work hard to keep prices low, this will depend on whether the UK can navigate an agreement with the EU to ensure frictionless tariff-free trade continues after October 31st.”

Nielsen head of retailer insight Mike Watkins said: “With so much economic uncertainty, it’s good news for shoppers that there was no pressure coming from shop price inflation during July.

“Looking ahead for the next few months, we anticipate broadly stable food inflation and non food retailers looking to keep any price increase to a minimum, as shoppers continue to be cautious around their retail spend.”

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