Overall shop prices reported deflation for the fourteenth consecutive month, accelerating to 1.8% in June.This is the deepest level of deflation since the series began in December 2006. Non-food reported an acceleration in deflation of 3.4% in June from 2.8% in May- the lowest ever recorded.
British Retail Consortium (BRC) director general Helen Dickinson said: “June saw plenty of good news for cash-conscious customers, and confirms that retailers have continued to work hard to help budgets go that bit further over the summer.”
She added: “This is the deepest level of deflation in non-food and the lowest rate of inflation for food since 2006 when our records began. Added to this, we see that consumer confidence is at its highest level since April 2005, while sports fans are doing well this summer with great deals to be found in Clothing, Footwear and Electricals.”
She continued: “The backdrop was equally promising with stable commodity markets and the continued strength of sterling suggesting inflation is set to remain low in the medium term. Although of course, a strong pound is not so good for those retailers exporting – one exciting and growing area in British retail. However, it is clear that retailers are making sure these positive economic benefits in the home market are being passed on to consumers while they themselves will cheer on the very low Producer Price Index – an indication of the cost pressures they face.”
Nielsen head of retailer and business insight Mike Watkins added: “Food inflation is still low, many supermarkets are price cutting and non-food prices remain deflationary, so the high street continues to generate little inflationary pressure. Little in the way of immediate seasonal or weather related price increases is anticipated so the outlook for the next three months is for relatively stable shop price inflation. Helped by the increases in consumer confidence since the start of the year, this should encourage shoppers to spend more freely over the summer months.”
