Shop price inflation returns to ‘normal levels’, BRC finds

Shop price annual inflation eased from 0.8% in April to 0.6% in May, according to the British Retail Consortium’s (BRC) latest shop price index. 

This has been confirmed to be below the three-month average rate of 0.9%, with the annual shop price growth being at its lowest since November 2021. 

Meanwhile, non-food remained in deflation at -0.8% in May, down from -0.6% in the preceding month. This was also below the three-month average rate of -0.4% and at the lowest rate of inflation since October 2021. 

Food inflation decelerated to 3.2% in May, down from 3.4% in April. This was also below the three-month average rate of 3.5% and is the 13th consecutive deceleration in the food category, with inflation being its lowest since February 2022.

Fresh food inflation slowed further in May, to 2%, down from 2.4% in April. This was below the three-month average rate of 2.3%. 

In addition, ambient food inflation decelerated to 4.8% in May, down marginally from 4.9% in April. This was also below the three-month average rate of 5% and is the lowest since June 2022.

Helen Dickinson, CEO of the BRC, said: “Shop price inflation has returned to normal levels, at just 0.6%. This was helped by slowing food inflation, with fresh food inflation falling to its lowest level since November 2021. Meanwhile, ambient food inflation remained stickier, especially for sugary products which continued to feel the effects of high global sugar prices. 

“In non-food, retailers cut furniture prices in an attempt to revive subdued consumer demand for big-ticket items, and football fans have been able to grab some bargains on TVs and other audio-visual equipment ahead of this summer’s Euros.”

She added: “Retailers are playing a key part in bringing inflation down, but future government policy must support this too. Retail plays a key role in every part of the country, from the smallest village to the largest city, employing millions of people, and serving millions more.”