While overall shop prices remains steady in May, food prices in saw a +0.4 jump compared to April, representing the fourth consecutive month of growing food prices, according to the latest BRC-NielsenIQ (NIQ) Shop Price Index. Food inflation also increased to +2.8% year-on-year in May, with fresh food prices driving much of the increase.
“While overall shop prices remain unchanged in May, food inflation rose for the fourth consecutive month,” Helen Dickinson, Chief Executive of the BRC, said, which was not being helped by rising Government costs.
“With retailers now absorbing the additional £5billion in costs from increased NICs and NLW, it is no surprise that inflation is rearing its head again. If statutory costs continue to rise for retailers, households will have to brace themselves for more difficult times ahead as prices rise faster.”
Helen Dickinson, CEO, BRC
“Whilst shoppers are seeing savings at the checkout as retailers increase promotional activity, increasing prices is still an extra challenge to consumer spending alongside rising household bills,” Mike Watkins, Head of Retailer and Business Insight, NielsenIQ, added. “And if consumer confidence remains weak as looks likely, then retailers may have to work harder to encourage shoppers to spend over the summer.”
GfK’s Consumer Confidence Index showed UK shopper confidence inched up by three points month-on-month in May, rising to -20, despite ongoing inflation concerns.
Non-food prices, however, remained in deflation, with the BRC-NIQ index suggesting they had fallen -1.5% year-on-year in May. Prices fell fastest in the electrical category “as retailers tried to encourage spending before any potential knock-on impact from U.S. tariffs,” according to Dickinson.
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