Shop prices in July reach lowest deflation in eight months

The non-food items category reached its lowest level of deflation since December 2017, at 1.4% in July, according to new British Retail Consortium (BRC) data.

The latest BRC-Nielsen Shop Price Index showed fresh food inflation rose 1.6%, compared with only 0.8% in June, and ambient food inflation increased by 2.2%, up from 1.6% compared with the previous month.

According to market research firm Nielsen the increase in food inflation over the early summer has been offset by “increased demand for food and drink”, as the result of the heatwave and incremental spend around the World Cup.

Helen Dickinson CEO of the BRC, said: “Expect this period of food price inflation to continue in coming months as despite global oil, food and commodities prices shrinking recently, the hot, dry conditions we have seen across the northern hemisphere means the pressure on prices will continue for some time to come.”

Mike Watkins, head of retail and business insight at Nielsen, added: “Looking ahead, with weather related changes in commodity markets anticipated, fluctuating currencies and wavering consumer spending, retailers still need to minimise price increases, as the underlying trading conditions across the retail industry remain challenging.”

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