Shop Price Index
Shop price inflation set to fall
Helen Dickinson OBE, Chief Executive, British Retail Consortium:
Households up and down the country will welcome the easing of shop price inflation in June. Food inflation slowed for the second consecutive month, particularly for fresh products, as retailers cut the price of many staples including milk, cheese and eggs. Retailers have spent months investing in price cutting measures, and other ways to support their customers. This was also seen for clothing and electrical goods, where prices were falling, helping customers to pick up a bargain ahead of the summer holidays.
If the current situation continues, food inflation should drop to single digits later this year. However, it is imperative that Government does not hamper this progress by introducing costly new policies. Reforms to the packaging Levy (Extended Producer Responsibility) and a new deposit return scheme, could create an additional £4bn burden on retailers and their customers. Along with a rise in business rates, and the introduction of border controls in October, these policies could hinder the Government’s efforts to combat inflation.
Mike Watkins, Head of Retailer and Business Insight, NielsenIQ:
Whilst prices are still higher than a year ago, the slowdown in food inflation is welcome news for shoppers, helped by supermarkets lowering prices of some staple goods. And if global supply chain costs continue to fall, we should now be past the peak of price increases. However, with most households needing to save money, purchasing behaviour for the rest of this year is still likely to shift towards essential needs with discretionary consumption being deprioritised or delayed.
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