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Discounting deepens in May

Shop prices for non-food items in May fell 2.5% year on year amid challenging market conditions.

This was the deepest drop in non-food prices since August 2016, the British Retail Consortium/Nielsen Shop Price Index reports.

Shop prices overall fell 1.1% year on year in May, making it the 61st month of falling prices.

Helen Dickinson, CEO of the BRC, said: “Overall shop prices fell again in May as the impact of the pound’s fall following the European Union [Brexit] referendum reduces and the challenging retail environment continues to mean retailers must compete on price.

“Retailers’ overall sales revenues are under pressure from falling prices and this comes at the same time as business rates and other public policy decisions are pushing up operating costs, leaving retailers squeezed at both ends. The consequences have been plain to see.

“Government and policy-makers must do more to address the burden of business rates and help to ease the pressure.”

Mike Watkins, head of retailer and business insight at Nielsen, added: “With continued increases in crude oil prices now adding further cost to the supply chain and weak demand on the high street, retailers need to be cautious about passing on any price increases over the next few months. The good news is after a difficult couple of months, shoppers now seem to be spending again.”

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