Shop price inflation in June fell slightly to 1.1% from 1.5% in May, hitting its lowest rate since November 2009, according to the British Retail Consortium (BRC) Nielsen Shop Price Index.
Deflation in non-food was up to 0.3% in June from 0.1% in May, as promotional activity increased due to many retailers beginning their summer sales. Prices fell month-on-month across clothing, footwear and electricals.
BRC director general Stephen Robertson said: “Overall shop price inflation is at its lowest for two and a half years. This is good news all round for hard-pressed customers and shows retailers holding back prices as commodity cost pressures ease.”
He added: “Weak consumer demand continues to drive deep and heavily targeted discounting, particularly among non-food goods.
“With real disposable incomes still dropping, let’s hope there’s more downward pressure to come from past falls in commodity prices working through to inflation.”
Nielsen senior manager, retailer services Mike Watkins added that this summer’s events, including the Olympics, may drive shopper spend.