Shop price inflation slowed in July, offering some relief to British households, but industry leaders warned that “growing pressures remain on the horizon”.
Inflation figures for July
According to figures from the British Retail Consortium (BRC) and NielsenIQ, shop prices in July were 0.9% higher than a year earlier, down from the 1.2% year-on-year rate recorded in June. Non-food inflation also fell, dropping from 0.6% in June to 0.2% in July.
Food price inflation decreased to 2.2% from 2.4% in June, but fresh food inflation rose to 3.1%, up from June’s 2.8%.
Factors behind the slowdown
Shoppers benefited from deals on snacks and alcoholic drinks during the FIFA World Cup. Clothing and footwear retailers offered significant price cuts as they began clearing summer stock. However, some categories, including electricals and health and beauty, saw higher inflation as increasing chip prices and manufacturing costs were passed on to customers.
BRC chief executive Helen Dickinson told the Press Association: “Good news for households in July as shop price inflation slowed. Retailers competed hard to limit prices rises, with a wave of summer promotions across food and other goods.”
She added: “Today’s figures are encouraging, growing cost pressures remain on the horizon.” Dickinson said: “Higher employment costs and packaging taxes, global instability and climate-related disruption all make it more expensive to get products onto shelves.”
Outlook for shoppers
Mike Watkins, head of retailer and business insight at NIQ, told the news agency: “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.”
He added: “So, we can expect promotions to continue to be an important part of driving demand for the rest of the summer.”
