Retail's Investment In Prices Is Paying Off But Prices Still going Up

2nd July 2024

When reading this release from the British Retail Consortium remember even if inflation has gone down prices are still going up even if at a slower rate. The use of the word down in every paragraph may give the impression that thing are getting cheaper - they are NOT as anyone doing the weekly shopping knows full well.

Shop Price annual inflation eased to 0.2% in June, down from 0.6% in May. This is below the 3-month average rate of 0.5%. Shop price annual growth is its lowest since October 2021.

Non-Food remained in deflation at -1.0% in June, down from -0.8% in the preceding month. This is below the 3-month average rate of -0.8%. Inflation is its lowest since October 2021.

Food inflation decelerated to 2.5% in June, down from 3.2% in May. This is below the 3-month average rate of 3.0% and is the fourteenth consecutive deceleration in the food category. Inflation is its lowest since December 2021.

Fresh Food inflation slowed further in June, to 1.5%, down from 2.0% in May. This is below the 3-month average rate of 1.9%. Inflation is its lowest since November 2021.

Ambient Food inflation decelerated to 3.9% in June, down from 4.8% in May. This is below the 3-month average rate of 4.5% and is the lowest since April 2022

Helen Dickinson, Chief Executive of the British Retail Consortium, said, "During the height of the cost of living crisis, retailers invested heavily in improving their operations and supply chains to compensate for the impact of global shocks on input costs. This is clearly paying off, with shop prices having risen just 0.2% over the past 12 months. Food inflation is now lower than any time since 2021 helped by falling prices for key products such as butter and coffee. Meanwhile, non-food prices went deeper into deflation as retailers tried to drive sales by discounting. This was particularly true for TVs with great deals to capitalise on the Euros fever.
Whoever wins Thursday's election will benefit from the work of retailers to cut their costs and prices, easing the cost of living for millions of households. The last few years should serve as a warning that where business costs rise significantly, consumer prices are forced up too. The next Government must address some of the major cost burdens weighing down the retail industry, including the broken business rates system, and inflexible apprenticeship levy. By doing so, retailers can invest in lower prices for the future - helping to reduce the cost of living pressures that many families face."

Mike Watkins, Head of Retailer and Business Insight, NielsenIQ, said, "Shop price inflation is still slowing and this will be of help to shoppers as they plan their household budgets for essential goods and services. And with uncertainty around discretionary spending, we expect the intense competition across the marketplace to keep price increases as low as possible this summer.”