Retailers have warned that shoppers could face higher prices in the months ahead, despite widespread summer promotions helping to keep inflation in check.
New figures from the British Retail Consortium (BRC) show shop price inflation remained at 1.2% in June, unchanged from the previous month. Food inflation eased from 2.7% to 2.4%, with lower prices on seasonal favourites such as strawberries and ice cream helping to offset wider cost pressures. Retailers also rolled out discounts on summer clothing, footwear and household items as warm weather boosted demand.
BRC Chief Executive Warns of Cost Pressures
Helen Dickinson, Chief Executive of the BRC, said: "Overall shop price inflation was unchanged in June. Food price growth eased, and as shoppers made the most of the sunshine, retailers helped keep the prices of summer treats such as strawberries and ice cream low thanks to bumper crops and strong competition."
"In clothing and general merchandise, retailers responded to the hot weather with promotions across summer essentials in clothing, footwear and lighter household textiles, despite overall non-food inflation rising."
However, she warned the current picture may not last if costs continue to increase for businesses. Dickinson said retailers are already facing higher National Insurance contributions, increased packaging costs and rising input prices linked to extreme weather and global uncertainty.
She added: "While a competitive market is keeping inflation in check for now, retailers face mounting cost pressures, including higher National Insurance, the triple packaging tax and higher input costs from extreme weather and geopolitical tensions."
Promotions Provide Temporary Relief
Mike Watkins, Head of Retailer and Business Insight at NIQ, said promotional offers had helped keep food inflation below the level seen a year ago, while discounts on seasonal products, including gardening and DIY items, had also provided some relief for household budgets.
He said retailers are likely to continue holding prices down for as long as possible during the busy summer period, particularly as major sporting events are expected to boost consumer spending.
