Shoppers have seen retail prices plunge more sharply this month on the back of food becoming cheaper, according to new data.
Shop prices fell by 1.2 per cent year on year in July, according to the latest BRC-NielsenIQ shop price index.
It represented an acceleration in price decreases after deflation of 0.7 per cent in June.
The British Retail Consortium’s chief executive Helen Dickinson said the slump in prices was partly “due to fierce competition between supermarkets keeping food prices low”.
“In response, non-food retailers, particular fashion businesses, have been working hard to keep consumer appetite alive with summer sales,” Dickinson said.
“Unfortunately for consumers, low prices may not last forever.”
She added: “Recently, retailers have faced huge cost pressures as a result of rising costs of shipping, haulage and petrol as well as frictions from exiting the EU.
“The additional paperwork and physical checks on EU imports in October and January may push prices up in the long term.”
Wider inflation across the economy has jumped in recent months, with the Consumer Price Index (CPI) rate of inflation lifting to 2.5 per cent in June – the highest in almost three years.
“It’s an uncertain time for many households as the economy slowly reopens, and recent NielsenIQ research shows 41 per cent of all shoppers are watching their spend more than they did before the pandemic,” NielsenIQ head of retail and business insight concluded.
“So, it’s important that retailers continue to keep prices low, especially as the increase in CPI is likely to lead to different shopping behaviours to help pay for the other increases in household spend.”
with PA Wires.