BRC: Food Inflation Lifting Shop Prices, However Overall Deflation Persists

By Steve Wynne-Jones
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BRC: Food Inflation Lifting Shop Prices, However Overall Deflation Persists

The British Retail Consortium (BRC) has said that food inflation in May rose to 1.4% in the UK, up from 0.9% the previous month, with fresh food inflation up 1.2% (1.0% in April).

The data presented in the BRC/Nielsen Shop Price Index, showed that overall shop price deflation of 0.4% in May, compared to a 0.5% decline in April. This is the shallowest delation period since November 2013, the report said.

Ambient food inflation was 1.8% in May, up from 0.8% in April. In addition, non-food deflation deepened to -1.5%, compared to a 1.4% decline in April.

Prices Falling

"Overall prices continue to fall year on year, albeit now at the slowest rate since November 2013,” said Helen Dickinson BRC chief executive. “However the trends for Food and Non-Food are now two quite different stories.

"With shorter stock turnaround times, the impact of the weaker pound has already started feeding through into food prices; although food price inflation this month is still well below the input cost price increases being faced by retailers.


“By contrast, heavy discounting in the wake of a weak start to the year and the fact that some businesses are still protected by hedging contracts are keeping non-food prices deflationary for now.”

Inflation Ahead

Dickinson added that despite the current deflationary period, the BRC expects shop price inflation to continue to rise over the coming year, with the impact of the weaker pound feeding through to the checkout..

“In terms of our imports of retail goods into the UK, three quarters of our imported food comes from the EU,” she said. “So to protect consumer food bills from the additional cost of unwanted new tariffs, a continuation of tariff-free trade with the EU must be the priority in the forthcoming Brexit negotiations.”

© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.

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