Shop price inflation in the UK remained almost unchanged in July amid weak consumer spending.
Data from the BRC-NIQ Shop Price Index shows the overall figure was just 0.2% this month, below the three-month average rate of 0.3% and the lowest since October 2021.
Non-food remained in deflation at -0.9% as clothing and footwear prices fell for the seventh consecutive month amidst persistent weak demand.
Meanwhile, food inflation slowed to 2.3% in July, down from 2.5% in June. The figure for fresh food eased to 1.4%, down from 1.5%, while ambient food inflation decelerated to 3.6% from 3.9%.
BRC Chief Executive Helen Dickinson noted that last year’s declines in global food commodity prices had continued to feed through, helping bring down food inflation rates. However, she warned that there are signs that this trend is reversing and could lead to renewed pressure on food prices in the future.
Dickinson concluded: “UK households suffered from high levels of inflation in 2022 and 2023 and can celebrate inflation levels returning to normal over the first half of this year. But, with the outlook for commodity prices remaining uncertain due to the impact of climate change on harvests domestically and globally, as well as rising geopolitical tensions, renewed inflationary pressures could be lurking just over the horizon.”
Mike Watkins, Head of Retailer and Business Insight, NielsenIQ, added: “As we cycle through high inflation comparatives from a year ago we can expect a lower level of inflation for a number of months to come. But with the squeeze on household finances continuing, consumer confidence only slowly improving, and poor summer weather so far, retailers will still need to keep any price increases to a minimum to encourage shoppers to spend.”
