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Economy

BRC warns of future price rises despite 0.6% fall in May

The decline represents a smaller fall than April’s 1.3% year-on-year drop, and sits below the 12 and six-month average price decreases of 1.7% and 1.8% respectively

Shop prices fell 0.6% year-on-year in May, the slowest rate of decline since February 2020 as the British Retail Consortium (BRC) warns of price rises on the horizon.

The decline represents a smaller fall than April’s 1.3% year-on-year drop, and sits below the 12 and six-month average price decreases of 1.7% and 1.8% respectively.

Helen Dickinson, chief executive at the BRC, recognised that May was “another good month for consumers looking for bargains”, she acknowledged that prices could begin to rise in H2 FY21.

She said: “While clothing and footwear prices continued to fall in May, the pick-up in demand once social restrictions lifted meant this drop was smaller than in previous months.

“Meanwhile, supermarkets fought hard to maintain market share and please thrifty customers by keeping prices low.”

Dickinson added: “However, cost pressures are bearing down. Global food prices are currently at their highest in seven years, shipping costs have risen threefold since 2019, and commodity prices are climbing.

“We will likely see these costs filter through in the second half of this year, and with the additional Brexit red-tape this Autumn, retailers may be forced to pass on some of these costs onto their customers.”

Dickinson claimed that the government can “help to ease the burden” on consumers by minimising the impact of “new checks and documentation” required from October.

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