UK shop prices are declining at the fastest pace in at least eight years, with non-food prices shrinking even further in June.
The latest report from the British Retail Consortium (BRC) and Nielsen suggests that shop prices dropped by 1.8 per cent in June, the largest fall the group has recorded since beginning the series in 2006.
Shop prices have now been dropping for 14 consecutive months, with the pace of the decline accelerating. Non-food prices dropped even further, down by 3.4 per cent year-on-year.
Clothing and footwear prices are still the sub-sector with the fastest declining prices, with a 13.7 per cent drop recorded.
Food prices are still increasing, but at the slowest pace that the survey has ever recorded, climbing by just 0.6 per cent during the 12 month period.
“Little in the way of immediate seasonal or weather related price increases is anticipated so the outlook for the next three months is for relatively stable shop price inflation,” said Mike Watkins of Nielsen.
Helen Dickinson of the BRC added that stable commodity prices and the strength of the pound would help to keep pressure on shop prices very weak in the medium term.
Health and beauty products offered the largest upward pressure on prices, with an increase of one per cent, still some way below inflation.