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Shoppers are boosted by constant fall in food prices

By Josie Clarke

Published 06/07/2016

British Retail Consortium chief executive Helen Dickinson
British Retail Consortium chief executive Helen Dickinson

Household budgets have received a boost with the deepest deflation in food prices for more than a year as an "extraordinary" 38-month run continues.

Overall shop deflation of 2% in June was deeper than the 1.8% decline in May, and lower than the 12-month average of 1.8%, according to the BRC-Nielsen Shop Price Index.

Food deflation deepened further in June, falling to 0.8% from 0.3% in May, while fresh food reported a further acceleration from 0.8% in May to 1.5% - the deepest rate since September last year.

Shoppers have been able to fill their baskets and pay less for their goods than the year before for 38 months.

British Retail Consortium chief executive Helen Dickinson said: "This month's figures show overall shop prices falling once again. This extraordinary 38-month run of deflation has undoubtedly been good for consumers.

"While it has been driven largely by falling prices for non-food items we have, from time to time, seen food in deflationary territory as well - which provides the real boon for household budgets.

"June was one of those months with food prices falling by 0.8%, the deepest deflation in food (fresh and ambient) for over a year.

"While the good news for household budgets continues, prices in store will eventually rise again. However, the time it takes for any price increases to make a reappearance will depend on a combination of factors, including the future value of the pound, commodity prices and any eventual impact of the Brexit vote on input costs."

Mike Watkins, head of retail and business insight at Nielsen, said changes to the economic landscape were tipped for next year but for now, the deflationary environment would continue.

Belfast Telegraph

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