NEWS3 June 2020

UK shop prices drop at fastest rate since 2006

Covid-19 News Retail UK

UK – Shop prices in May fell at their fastest rate since 2006, according to the latest British Retail Consortium (BRC)/Nielsen shop price index.

Retail crop

The monthly index, which studied the week of 1st May to 7th May, found prices reduced by 2.4% compared with 1.7% in April this year.

The fall in prices was also significantly below the year’s average decrease of 0.7% and a six-month average drop of 1%. The BRC said the fall in shop prices was at its highest rate since December 2006.

Non-food prices were the biggest reason for the decline, with a 4.6% drop in May compared with a 3.7% reduction in April. The yearly and half-yearly average rates were falls if 1.9% and 2,4% respectively for non-food items.

Food inflation rose, however, by 1.5% in May, although this was down from the 1.8% increase registered in April. May’s increase in food prices was exactly in line with the average of the past 12 months and six months.

Fresh food inflation was at 0.5%, a drop from the 1% rise seen in April and below the year average increase of 0.8% and half year average of 0.6%.

Ambient food grew at a rate of 2.9%, but was still below April’s total of 3%. However, ambient food price rises were still above average for the year and the past six months, which were at 2.5% and 2.6% respectively.

Helen Dickinson, chief executive of the BRC, said: “Even as non-essential shops begin to reopen from 15th June, consumer demand is expected to remain weak and many retailers will have to fight to survive, especially with the added costs of social distancing measures. 

“Government support remains essential, both to rebuild consumer confidence and to support the thousands of firms and millions of jobs that rely on it.”