Shop price inflation remained unchanged in July, but uncertainty continues

The latest BRC-NielsenIQ Shop Price Index shows annual shop price inflation remained unchanged at 0.2% in July.

This is below the three-month average rate of 0.3% and remained at its lowest rate since October 2021.

Food inflation fell marginally to 2.3% in July, down from 2.5% in June. This was below the three-month average of 2.7% and the lowest since December 2021.

Fresh food inflation saw a slowdown to 1.4% in July, down from 1.5% the previous month.

Meanwhile, ambient food dropped to 3.6% in July compared with 3.9% in June. This was below the three-month average of 4.1%.

Non-food continued to deflate at -0.9% in July, up from -1% in June, which was in line with the three-month average deceleration of -0.9%.

Helen Dickinson, chief executive of the BRC, said: “Shop price inflation in July remained unchanged on the previous month. Non-food price deflation continued, albeit at a slower rate than June.

“Holidaymakers could pick up bargain summerwear and summer reads as clothing and footwear prices fell for the seventh consecutive month amid 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. Sports gatherings for Wimbledon and the Euros benefited from discounted snacking items such as crisps and soft drinks.

“UK households suffered from high levels of inflation in 2022 and 2023, and can celebrate inflation levels returning to normal over the first half of this year. But with the outlook for commodity prices remaining 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.”