Shop price inflation gathers pace in May

Shop inflation edged up this month, as rising costs from wages, taxes and political uncertainty drove non-food retailers to push up their prices during May.

Following several years of deep discounts, goods in sectors such as furniture and health & beauty have seen year-on-year prices to May 2019 jump, according to a new index carried out by Nielsen and the British Retail Consortium (BRC).

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Non-food prices increased in May by 0.2 per cent compared to April, when prices decreased by 0.6 per cent, marking the second month of non-food inflation in 2019, in contrast to the past six years of deflation.

Meanwhile, food inflation, while remaining above the 12-month average, continued to slow down.

Mike Watkins, head of retailer and business insight at Nielsen, said: "Inflation has returned to non food but consumers remain cautious and there is intense competition on the high street. With non food retailers facing uncertain levels of demand, price discounting could quickly return if demand weakens over the next few months."

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Helen Dickinson chief executive of the BRC, added: "Rising costs associated with currency depreciation, stockpiling, rising minimum wage and the Apprenticeship Levy, have all put upwards pressure on prices for a while, and it now appears that retailers cannot absorb them any longer. Unless the hovernment addresses future cost rises, including spiralling business rates, we may see larger price rises in the future."