Shop prices have returned to deflation for the first time in eight months, driven by fierce competition on the high street, new figures have shown.
The BRC-Nielsen Shop Price Index has revealed that shops lowered prices year on year by 0.1% in June, compared with an increase of 0.8% in May. It is the first deflation in shop prices since October 2018.
Non-food prices fell by 1.2% year on year in June, from a 0.2% increase in May. This was significantly below the 12 and six-month average price decline of 0.6% and 0.3% respectively.
British Retail Consortium chief executive Helen Dickinson said: “A no-deal Brexit would hinder retailers’ abilities to continue to contain prices, as checks and delays would raise the cost of doing business. The 31 October deadline also comes at the worst possible time for retail – the height of preparations for Christmas and Black Friday, which are peak trading periods, threatening to cause disruption for consumers and businesses, and making further stockpiling of goods almost impossible. It is vital that the next prime minister reaches a deal with the EU and avoids the cliff edge.”
Mike Watkins, head of retailer and business insight at Nielsen, said: “On the non-food high street, retailers are maintaining the level and depth of price cuts, to help drive footfall following dampened demand due to the weather and wavering retail spending.”