Belfast Telegraph

Shop prices falling at their slowest rate since 2013

By Josie Clarke

Shop prices edged closer to ending a four-year trend of deflation in June as the effects of the pound's depreciation and rising commodity costs built up, figures show.

Overall shop prices were down 0.3% year-on-year, the shallowest deflation rate since November 2013, according to the latest BRC-Nielsen Shop Price Index.

Food prices increased on average by 1.4% in June, a similar pace to May's rise and the highest since January 2014.

Fresh food prices appear to be on an upward trajectory, recording a 1.4% increase in June, 0.2 percentage points higher than in May and the highest increase since February 2014.

British Retail Consortium chief executive Helen Dickinson said: "The fact that the headline number, minus 0.3%, shows that prices are still down on last year should not be misunderstood.

"The year on year numbers belie the fact that prices have been heading upwards for the last six months. It's just that significant deflation in the second half of 2016 means there has been considerable ground to make up in the year on year figures."

Ms Dickinson said the steadying of inflation in June was likely to be a "brief hiatus", and the expectation was for shop prices to continue trending upwards in coming months.

Aodhan Connolly, director of the Northern Ireland Retail Consortium, said: "Northern Ireland consumers continue to benefit from falling shop prices, however, this is the shallowest rate of decline in over three and a half years.

"It is a clear indication of the direction of travel, suggesting that the sustained period of falling shop prices witnessed over recent years is coming to an end. Retailers are battling to keep prices down, but with global food commodity prices up, the exchange rate down, and public policy costs mushrooming, ­­retailers in some categories are now regrettably being forced to pass some of this onto ­customers."

Mike Watkins, head of retailer and business insight at Nielsen, said: "With inflation rising in essential goods and services, many households are now seeing their monthly household expenditure come under pressure.

"Whilst this may add to the uncertainty around discretionary spending, the good news is that shop prices are increasing at a slower rate.

"Shoppers are also able to find further savings in retail with low price strategies across the grocery sector and competition across the marketplace keeping prices as low as possible."

Belfast Telegraph