Fierce competition on the high street keeps overall shop prices in the UK down for May, according to a latest study spearheaded by the British Retail Consortium (BRC).
The monthly BRC-Nielsen Shop Price Index claimed total retail prices across the board saw a deflation of 1.8% in May from the 1.7% decline in April, keeping in-line with the 12 month average.
The statistic represents no sign of an end for shop price deflation in UK retail, while Non-food deflation slowed to -2.7% from 2.9% in April. This is in line the 12-month average of -2.7%.
Helen Dickinson OBE, chief executive, British Retail Consortium, said: “The fact that today’s figures remain deflationary doesn’t come as a great surprise. We’ve experienced a record run of falling shop prices and, for the time being, there’s little to suggest that’ll end any time soon – so the good news for consumers continues.
“Looking slightly longer term we know that the recent commodity price increases will start to put pressure on retailers to raise their own prices. We would normally expect these input costs to filter through to prices eventually, but the big question is how far fierce competition in the industry will insulate consumers from price increases. If retailers do continue to absorb these costs it’ll be more important than ever that other external costs, business rates chief among them, are brought under control.”
Mike Watkins, head of retailer and business insight, Nielsen, added: “Non-food prices also continue to fall, and with shoppers indicating that they are becoming more cautious about spending, retailers will have to keep prices the same or probably even lower over the next six months.”