Food could be about to get more expensive after more muted price falls in May
Prices in shops fell again in May, as bargain hunters benefitted from lower prices, however price rises could be on the cards in the near future, the BRC has warned.
Shop prices fell 0.6 per cent year-on-year last month, marking the slowest rate of price declined since February 2020.
On average, in the last six months’ prices have fallen by 1.8 per cent each month, meaning prices in May fell at the lower rate in more than a year.
The price of food products fell just 0.3 per cent in May, down from April’s decline on 0.6 per cent, marking the second month in a row of cheaper food prices.
Fresh food prices dipped one per cent in May, down from 1.5 per cent in April.
The price of shelf-safe food increased 0.7 per cent, down from a year average of two per cent, as retailers paused discounting to reduce stockpiling at the start of the pandemic.
For non-food items, prices fell by just 0.8 per cent, compared to a decline of 1.7 per cent in April, marking the slowest rate of decline since May 2019.
Helen Dickinson, chief executive of the British Retail Consortium (BRC), said: “While clothing and footwear prices continued to fall in May, the pick-up in demand once social restrictions lifted meant this drop was smaller than in previous months.
“Furniture and electricals saw prices rise as retailers felt the lingering impact of global supply chain disruption from earlier this year.
“Meanwhile, supermarkets fought hard to maintain market share and please thrifty customers by keeping prices low.”
It is unlikely food prices will remain so low, Dickinson said, with global food prices currently at their highest in seven years, increased shipping costs and Brexit red tape likely to mean retailers are forced to pass some of those costs onto their customers.
“Government can help to ease the burden on British consumers by finding ways to minimise the impact of new checks and documentation required from October,” she added.