Shop prices hit lowest level since 2009 as food edges down

Overall shop prices, including food and non-food, dropped 1.8% in May year-on-year, marking the 37^th consecutive month of falling retail prices and the lowest level since November 2009, according to the BRC-Nielsen Shop Price Index.

This decrease in prices is broadly in line with the 12-month average and was driven by decreases in non-food items including a 7.5% drop in clothing and footwear prices.

However, deflation of non-food items did slow to 2.7% last month, compared with 2.9% in April.

After reporting a marginal rise in April, food prices fell 0.3% in May, driven by a 0.8% decline in fresh food prices.

Increases in ambient food prices slowed to 0.4% last month after a 1% rise in April.

Nielsen head of retailer and business insight Mike Watkins said: “Shop price inflation remains below consumer price inflation, and falling food prices are still being driven lower by global commodity prices as well as intense competition, which shows no sign of relenting any time soon.

“Non-food prices also continue to fall, and with shoppers indicating that they are becoming more cautious about spending, retailers will have to keep prices the same or probably even lower over the next six months.”

British Retail Consortium chief executive Helen Dickinson added: “We’ve experienced a record run of falling shop prices and, for the time being, there’s little to suggest that’ll end any time soon – so the good news for consumers continues.

“Indeed, with food prices remaining flat at the same time as wages continue to grow means customers will have yet more money in their pockets at the end of their weekly shop.”