Shop price rises back to ‘normal levels’

Inflation in UK shops is now at “normal levels” and prices for some items have fallen, according to the latest retail industry data.

The British Retail Consortium (BRC) and research firm NielsenIQ found that shop prices rose at an annual rate of 0.6% in May, down from 0.8% in April. The rate is at its lowest since November 2021.

Food inflation fell for the 13th consecutive month to 3.2%, from 3.4% in April. Price rises remained higher for ambient food than for fresh food, especially for sweet products which continued to reflect the effects of high global sugar prices.

Meanwhile, prices of non-food items have been falling, with deflation standing at -0.8% in May after -0.6% in the prior month.

Retailers cut furniture prices in an effort to revive subdued consumer demand, and there have been promotions on TVs and other audio-visual equipment ahead of the Euro 2024 football tournament.

BRC chief executive Helen Dickinson said that “future government policy” must support retailers to keep inflation down.

“With an election in a matter of weeks, it is vital that parties detail their support for customers and retailers in their upcoming manifestos,” she added.

Mike Watkins, head of Retailer and Business Insight at NielsenIQ, said: “After a number of months of falling input prices, we are now seeing food inflation stabilise and retailers continue to pass on price cuts to shoppers.

“Across the industry whilst inflationary pressure has eased and there is some improvement in shopper sentiment, the unseasonable weather has dampened retail sales so lower prices look set to continue and promotional activity is likely to increase drive demand.”

Official figures released last week showed that the overall rate of inflation eased to 2.3% in April — the lowest level in almost three years.