Shop price inflation in the UK slowed in July, offering some relief to households, though retailers caution that pressures are building on the horizon. According to the British Retail Consortium (BRC)-NIQ figures, shop prices are now 0.9% higher than a year ago, down from 1.2% in June.
Non-food inflation fell to 0.2% from 0.6% in June, while food price inflation eased to 2.2% from 2.4%. However, fresh food inflation rose to 3.1%, up from 2.8% the previous month.
Summer deals and promotions
Shoppers benefited from discounts on snacks and alcoholic drinks during the football World Cup. Clothing and footwear retailers also offered significant reductions as they cleared summer stock. In contrast, categories such as electricals and health and beauty experienced higher inflation due to rising chip prices and manufacturing costs.
Helen Dickinson, chief executive of the BRC, commented: “Good news for households in July as shop price inflation slowed. Retailers competed hard to limit price rises, with a wave of summer promotions across food and other goods. While today’s figures are encouraging, growing cost pressures remain on the horizon. Higher employment costs and packaging taxes, global instability and climate-related disruption all make it more expensive to get products onto shelves.”
Outlook for rest of summer
Mike Watkins, head of retailer and business insight at NIQ, added: “Shop price inflation remains lower than a year ago, which will help shoppers as they manage other increases in household spend, such as energy and fuel. So, we can expect promotions to continue to be an important part of driving demand for the rest of the summer.”
