Period Covered: 01 - 05 July 2019
- July Shop Price deflation was steady at -0.1%. July was the second consecutive month of deflation since October 2018. This is below the 12- and 6-month average price increases of 0.3% and 0.4%, respectively.
- Food inflation eased slightly to 1.7% in July from 1.8% in June.
- Fresh Food inflation slowed in July to 1.2% from 1.4% in June. Within the Fresh Food category, there was a mix of inflationary pressures. Meat was the only deflationary element of the category, with prices falling for a third consecutive month, as global price developments are feeding through into final consumer prices.
- Ambient Food inflation accelerated to 2.4% in July up from 2.3% in June.
- Non-Food prices fell at by 1.2%, the same rate of decrease as in June.
- Similar to last month, July’s headline inflation figure was driven by the sharp decline in Non-Food prices. Out of the seven Non-Food index categories, inflation eased for three of them and other three were deflationary. While technological developments have been contributing to the long-term decline of prices of Electricals and Clothing & Footwear, low consumer confidence has kept shoppers from splashing on discretionary items. Given the competitive environment, retailers are, on average, using price discounts to attract customers.
Helen Dickinson OBE, Chief Executive, British Retail Consortium:
“Shop prices fell by 0.1% for the second month in a row. Many consumers will be pleased to see the price of non-food products continuing to fall at a steady rate, underlining the stiff competition between retailers that is driving down prices. Furthermore, food price inflation eased slightly, in part due to the fall in global food prices.
“While we expect food inflation to remain steady over the next few months as retailers work hard to keep prices low, this will depend on whether the UK can navigate an agreement with the EU to ensure frictionless tariff-free trade continues after October 31st.”
Mike Watkins, Head of Retailer and Business Insight, Nielsen:
"With so much economic uncertainty, it’s good news for shoppers that there was no pressure coming from shop price inflation during July. Looking ahead for the next few months, we anticipate broadly stable food inflation and non food retailers looking to keep any price increase to a minimum, as shoppers continue to be cautious around their retail spend.”