Wednesday 30 June 2021 10:43 am

Shop prices fall faster in June

The price of goods in UK shops fell at a faster rate in June than in May as businesses sought to maintain momentum in consuming spending, according to data published today.

The British Retail Consortium’s Shop Price Index showed shop prices dropped 0.7 per cent annually in June, a faster rate than May’s 0.6 per cent decline.

However, last month’s fall was slower than the 12-month average price decrease of 1.6 per cent, indicating some firms may be starting to raise prices as demand in the economy picks up.

Helen Dickinson OBE, chief Executive of the British Retail Consortium, says: “There is good news for consumers as June saw overall prices fall at a slightly faster pace than last month.”

“Non-food prices, particularly for fashion, remained deflationary as businesses tried to prolong the recent pickup in consumer spend. Food prices also fell, which is a testament to supermarkets battling to keep prices low for their customers.”

The index shows non-food prices dipped 1 per cent in June, compared to a 0.8 per cent fall in May, although the fall was slower than the annual average decrease of 2.9 per cent.

Food price falls slowed to 0.2 per cent in June from 0.3 per cent in the previous month. This is the third consecutive month food prices fell, but the rate is still below the 12-month average of 0.5 per cent.

“Retailers’ costs are continuing to mount due to global food price increases, Brexit red-tape, Covid related supply chain disruption, raw commodity shortages and increased shipping and petrol costs” Dickinson added.

“The increasing cost burden on retailers may be passed onto the consumer, threatening price rises as the pressure mounts in the months ahead, especially with additional Brexit checks this autumn.”

Mike Watkins, head of retailer and business insight, NielsenIQ: “The fact that shop prices remain in negative territory despite the recent rise in CPI is indicative of the competitive retail landscape in the UK and keeping prices low for as long as possible is good news for shoppers.”