Retail inflation remains low as clothing and footwear prices keep falling
Posted on in Business News
Annual shop price inflation remained at 0.2% in July, according to the BRC-NielsenIQ Shop Price Index, the lowest rate since October 2021. Non-food prices remained in deflation, with an annual rate of -0.9% in July, lessening from the -1.0% the month before.
Food inflation softened to 2.3% in July from 2.5%, continuing to ease and now at the lowest annual rate of inflation since December 2021, with fresh food and ambient food prices both decelerating.
British Retail Consortium chief executive Helen Dickinson said, "clothing and footwear prices fell for the seventh consecutive month amidst persistent weak demand, and the prices of books fell".
"The 2023 declines in global food commodity prices continued to feed through, helping bring down food inflation rates over the first seven months of 2024.
"However this shows signs of reversing, suggesting renewed pressure on food prices in the future."
She noted that as the outlook for commodity prices remains uncertain due to the impact of climate change on harvests domestically and globally, as well as rising geopolitical tensions, "renewed inflationary pressures could be lurking just over the horizon.”
NielsenIQ's head of retailer and business insight, Mike Watkins, added that lower levels of shop price inflation can be expected "for a number of months to come".
"But with the squeeze on household finances continuing, consumer confidence only slowly improving, and poor summer weather so far, retailers will still need to keep any price increases to a minimum to encourage shoppers to spend."