Shop prices fall more slowly in June, BRC survey shows

Shop prices fell more slowly in June but the pace of decline is likely to pick up again, a survey showed.

Prices at retailers dropped 0.5% in June versus a year ago – less than half the 1.1% rate recorded in May, the British Retail Consortium survey found. Shop prices have fallen for 62 months in a row.

Food inflation was unchanged at 1.2% from May and was up on April’s 1.2% reading.

The difference was in non-food prices whose 1.6% fall was almost a full percentage point lower than in May, when prices eased 2.5%. June’s non-food inflation reading was the lowest since December 2017.

Helen Dickinson, the BRC’s chief executive, said the drop in non-food inflation was caused mainly by some retailers introducing new ranges earlier than planned.

"This effect on the index will be temporary and, given the strength of the competitive pressures in the industry, we’re likely to see non-food prices slide further into deflation in coming months," Williamson said.

Fresh food inflation slowed slightly to 0.8% from 0.9% the month before, while ambient food inflation edged down to 1.6% from 1.7%.

Dickinson said: "Food shoppers can breathe a sigh of relief with the rate of food inflation remaining steady and retailers continuing to fight back against a tough trading environment with competitive pricing and deals. Changes in global food prices of dairy and cereal as well as higher oil prices will mean this battle looks set to continue in the coming months."