- Annual inflation fell to 0.6% last month, according to BRC and NielsenIQ
- Food inflation decreased for the 13th consecutive month, falling to 3.2% in May
Price rises in stores have reached their lowest levels in more than two years thanks to falling costs of furniture and televisions, industry data reveals.
Annual inflation fell from 0.8 percent in April to 0.6 percent last month, the best result since November 2021, according to the British Retail Consortium and research firm NielsenIQ.
Food inflation eased for the 13th consecutive month, slowing to 3.2 percent in May even as high global sugar prices kept the cost of confectionery high.
Lower inflation: Price increases in stores have reached their lowest levels in more than two years, according to the British Retail Consortium and NielsenIQ
Meanwhile, non-food deflation accelerated to -0.8 percent, compared to the three-month average of -0.4 percent.
The BRC noted that retailers cut furniture prices to try to boost depressed demand for big-ticket items, while many football fans bought cheaper televisions and audio equipment in anticipation of this summer’s European Championship.
Mike Watkins, head of retail and business insights at NielsenIQ, further suggested that bad weather continued to contribute to falling prices due to its negative impact on sales.
This follows the Office for National Statistics blaming bad weather for overall UK retail sales falling by an estimated 2.3 per cent in April, when there were just 79 per cent of average sunshine hours.
Last week, the ONS said wet conditions worsened trading in clothing and footwear stores, which saw sales fall by 5.1 percent, and in stores selling games, toys, furniture and sports equipment.
Watkins said: “Unseasonal weather has dampened retail sales, so lower prices look set to continue and promotional activity is likely to drive demand.”
The British retail industry has struggled for more than two years as rising energy and food prices, combined with rising interest rates, have damaged profit margins and weakened consumer spending.
However, declining inflation and rising wages are leaving many businesses hoping for a revival of in-store traffic and shopping in the coming months.
After reaching a four-decade high of 11.1 percent at the end of 2022, the UK inflation rate has subsequently fallen to just 2.3 percent following a fall in oil and gas prices and successive rises. of interest rates by the Bank of England.
Helen Dickinson, BRC chief executive, praised the improving inflation figures but warned: ‘As the cost burden of new policies rises – from business rates to packaging taxes – it affects not just companies, but also their customers.
“With an election in a matter of weeks, it is vital that parties detail their support for customers and retailers in their upcoming manifestos.”
