Shop prices fall 1.4% to record thirteenth month of deflation

May’s British Retail Consortium (BRC) Nielson Shop Price Index said that prices have been kept low as food retailers compete in the price war and non-food retailers keep value-for-money at the forefront.

Food inflation was unchanged at 0.7% from April, the lowest ever recorded.

Non-food recorded 2.8% deflation in May from 2.7% deflation in April. The category has reported deflation for the fourteenth consecutive month.

BRC director general Helen Dickinson said: “Food inflation remaining at its lowest level since our records began is great news for hard-pressed households as the summer approaches, and confirms that retailers are responding to current conditions by matching attractive offers with those products most in demand at this time of the year.”

The Index said food inflation stayed at its lowest level since it started in December 2006. Year-on-year fresh food inflation rose 0.6% in May and ambient food fell to 0.9%. Overall food inflation has averaged just 1.8% over the last 12 months and 0.7% in the last three months.

Dickinson added: “We’ve also past the fourteenth consecutive month of non-food deflation, mainly as the result of good bargains in categories popular with consumers in summer months such as clothing and footwear. Value was also a mainstay across the gardening and DIY categories, as retailers competed to cater for strong demand over the May Bank Holiday.

Across non-food, the only category to record inflation year-on-year was health and beauty, at 0.4%. Clothing and footwear has the biggest rate of deflation and reached 11.4% against May last year, while electricals are deflating at the next biggest rate, recording deflation of 3.1%

Dickinson said that with the World Cup kicking off next week, retailers are expected to keep prices down.