Period covered: May 17Published: May 31, 2017Read time: 1min

Shop Price Index

SHOP PRICES PUSHED CLOSER TO INFLATION BY PICK UP IN FOOD

Helen Dickinson OBE, Chief Executive, British Retail Consortium: 

"Overall prices continue to fall year on year, albeit now at the slowest rate since November 2013. 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

Nevertheless, we expect the general trend of inflation to be upwards over the course of the year, which will squeeze disposable income at a time when wage growth is slowing. In terms of our imports of retail goods into the UK, three quarters of our imported food comes from the EU. 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."

Mike Watkins, Head of Retailer and Business Insight, Nielsen: 

"Food inflation continues to move up and is currently impacting ambient foods more than fresh as the impact of currency change moves through the supply chain, but still remains lower than the increase in the consumer price index. Consumer expenditure on food and drink has held up well so far this year with shoppers visiting supermarkets more often to seek out savings and to find the best value for money, strategies which are helping shoppers to manage changes in their household budget. "