Falling prices not set to last
Period Covered: 01 – 07 June 2021
- Shop price deflation accelerated to 0.7% year-on-year in June compared to May’s decrease of 0.6%. This is a slower rate of decline than the 12- and 6-month average price decreases of 1.6% and 1.6%, respectively.
- Non-food deflation accelerated to 1.0% in June, compared to a fall of 0.8% in May. This is a slower rate of decline than the 12- and 6-month average price declines of 2.9% and 2.5%, respectively.
- Food deflation slowed to 0.2% in June from May’s deflation of 0.3%. This is the third consecutive month when Food prices fell. This is below the 12- and 6-month average price changes of 0.5% and -0.1%, respectively.
- Fresh food prices fell for the seventh consecutive month in June, although deflation slowed to 0.7% in June from 1.0% in May. This is below the 12- month average price growth rate of -0.4% and above the 6-month average price growth of -0.9%.
- Ambient food inflation eased to 0.6% in June, down from 0.7% in May. This is below the 12- and 6-month average price increases of 1.8% and 1.2%, respectively.
Helen Dickinson OBE, chief executive, British Retail Consortium: “There is good news for consumers as June saw overall prices fall at a slightly faster pace than last month. Non-food prices, particularly for fashion, remained deflationary as businesses tried to prolong the recent pickup in consumer spend. Food prices also fell, which is a testament to supermarkets battling to keep prices low for their customers.
“Meanwhile, retailers’ costs are continuing to mount due to global food price increases, Brexit red-tape, Covid related supply chain disruption, raw commodity shortages and increased shipping and petrol costs. The increasing cost burden on retailers may be passed onto the consumer, threatening price rises as the pressure mounts in the months ahead, especially with additional Brexit checks this autumn. The government must help to minimise the cost impact on consumers by ensuring that the new checks and documentation requirements this autumn avoid adding further friction to the import of goods.”
Mike Watkins, head of retailer and business insight, NielsenIQ: “The fact that shop prices remain in negative territory despite the recent rise in CPI is indicative of the competitive retail landscape in the UK and keeping prices low for as long as possible is good news for shoppers. However, with 4 in 10 shoppers watching their spending more than they were before the pandemic, this suggests that many millions of households are going to see their budgets squeezed should prices start to rise.”