AUS
NZ
UK
CA
USA
IND
Summary
- The decline in UK’s shop prices rose to 0.7% in June, while May saw a 0.6% decrease.
- BRC-NielsenIQ shop price index showed non-food deflation increased 1% in June compared to a 0.8% fall in May.
- The food category in June recorded deflation slowing to 0.2% compared to 0.3% in May.
The decline in UK’s shop prices increased to 0.7 per cent in June compared to a year ago, the British Retail Consortium (BRC)-NielsenIQ shop price index showed. In May, the decline was of 0.6 per cent, in June, the decline accelerated because the retailers were trying to drive recovery in sales with cheaper clothes as non-essential shops opened for customers after a prolonged period of lockdowns.
Deflation in non-food category increased 1 per cent in June compared to a 0.8 per cent fall in May. Deflation in the food category in June slowed to 0.2 per cent compared to 0.3 per cent in May, making food cheaper for the third straight month.
Copyright © 2021 Kalkine Media
What numbers say
Prices of fresh food dropped for the seventh straight month in June, slowing to 0.7 per cent compared to 1 per cent a month ago, primarily due to prices on non-food products falling 1 per cent and less expensive fashion items driving up deflation.
BRC’s CEO Helen Dickinson said that falling food prices show that supermarkets are competing to keep prices low to attract customers. However, costs are piling for retailers because of a combination of factors like an increase in food prices globally, supply chain disruptions due to Covid, Brexit related issues, an increase in petrol costs and shipping charges, and a shortage in raw materials.
Fall in shop prices continued though there was a surge in inflation across the country primarily because of higher fuel costs. The Office for National Statistics had said earlier that Consumer Price Index (CPI) inflation rose to 2.1 per cent in May, which was beyond the Bank of England’s target rate of 2 per cent.
NielsenIQ’s retailer and business insight head, Mike Watkins, said that prices of shops remaining in the negative zone despite the recent CPI inflation points towards the UK’s competitive retail landscape.
However, he also warned that four in 10 shoppers were more careful now of their spending than they were before Covid-19 begun, households across the UK are set to see budgets being squeezed if prices start rising.
Concerns ahead
Last week it was reported that UK’s consumer sentiment continued to be stable at its highest level since June, when the pandemic broke out, as the global economy is gradually reopening post prolonged lockdowns and fear of rising inflation.
GfK’s consumer barometer showed that June’s consumer confidence was at -9, the same as in April. But it was lower than the consensus forecast of -8 by economists of Wall Street Journal, while a Reuters poll recorded -7, which was a small rise from the consensus.
All the numbers come in the backdrop of prime minister Boris Johnson delaying the final stage of lockdown easing that was set for this month as Delta variant cases, first detected in India, were on the rise in the UK.
