Shop price decline slows
Period Covered: 01 – 07 July 2020
- Shop prices fell by 1.3% in July compared to a decrease of 1.6% in June. This is below the 12-month average price decrease of 0.9%, but above the 6-month average price decrease of 1.4%.
- Non-food prices fell by 2.9 % in July compared to a decline of 3.4% in June. This is below the 12- average price decline of 2.3%, but above the 6-month average price decrease of 3.1%.
- Food inflation was steady at 1.5% in July, the third consecutive month when prices increase at the same rate. This is in line with the 12- and 6-month average price increases of 1.5% and 1.5%, respectively.
- Fresh food inflation accelerated to 0.9% in July, up from 0.5% in June. This is above the 12- and 6-month average price increases of 0.7% and 0.6%, respectively.
- Ambient food inflation slowed to 2.3% in July, down from 2.9% in June. This is below the 12- and 6-month average price increases of 2.5% and 2.7%, respectively.
Helen Dickinson OBE, chief executive, British Retail Consortium:
“Despite firms facing increasing costs, shop prices continued to fall in July, albeit at a reduced pace compared to the previous month. This was driven by a slower decline in non-food prices: sectors which saw a release of pent-up demand, such as electricals and furniture, saw fewer promotions. On the other hand, sectors where consumer spending remains weak are under significant pressure – for instance prices for health and beauty products barely moved.”
“Falling prices at tills is good news for shoppers, and will hopefully tempt more people onto our high streets and retail destinations. This remains a difficult time for the industry as a whole and Government could help to mitigate this by supporting retailers and landlords over rent costs and taking action to boost consumer demand. Without this, we may see many more store closures and subsequent job losses.”
Mike Watkins, head of retailer and business insight, Nielsen:
“There was no further upwards pressure on shop prices in food during July and deflation continues across the non-food channels. Now that all of retail has re-opened for business, keeping prices stable will be important as it’s going to be difficult for retailers to second guess the strength of consumer spend with social distancing measures continuing, and consumer confidence still low.”