Summer sees consumer optimism rise
Summer has started with rising consumer optimism and falling shop prices for the 26th month in a row, figures show.
The BRC-Nielsen shop price index showed year-on-year deflation at 1.3%, compared with 1.9% in May.
Annual food deflation slowed to 0.4% in June from its record low rate of 0.9%.
Fresh food deflation slowed to 1.2% in June from 1.9% in May, with a number of categories moving into inflationary territory such as oils and fats and fruit and vegetables.
Meat and fish were the only categories to report deflation.
Mike Watkins, head of retailer and business insight at Nielsen, said: "Retailers continue to use price cuts and promotions to stimulate sales, which is helping to maintain shop price deflation, and we see little evidence to suggest that prices will rise in the near future.
"With many food retailers still using price cuts to attract new shoppers, this is lowering the cost of the weekly shop and so the overall CPI figure in the UK.
"Deflation and price-led competition will continue to be a key driver of sales growth for some time yet."
British Retail Consortium (BRC) director general Helen Dickinson said: "Consumer confidence hit a 15-year high which suggests that shoppers will feel more comfortable about buying major purchases.
"It also suggests that consumer spending, one of the main drivers of the recovery, should remain robust over the summer.
"Shoppers wishing to invest in their home won't be disappointed with great deals to be found in furniture and flooring and gardening and hardware in particular.
"We're seeing a strong appetite for consumer credit, inflation remains at an historic low, unemployment continues to fall and wages have started to rise. The wider macro-economic data continues to be supportive for the consumer.''