UK shop prices have now been falling for four straight years

 
Helen Cahill
Follow Helen
Tesco Opens First Of Its 'Fresh And Easy' Stores In L.A
Food prices have started rising (Source: Getty)

Shop prices have now been falling for four years as tough competition in the retail sector has continued to favour consumers, despite rising costs for UK businesses.

In April shop prices fell by 0.5 per cent year-on-year, according to new data from the British Retail Consortium (BRC). Prices on non-food items fell 1.4 per cent.

Read more: Balls! Mozzarella might get far more expensive without temporary trade deal

Grocers, however, were forced to pass on the rising input costs caused by the fall in the value of the pound. Prices on food items were up 0.9 per cent in April.

Prices on clothing and footwear items fell furthest of any non-food category, down by 5.4 per cent year-on-year, in line with a price drop of 5.9 per cent recorded in March.

Category Percentage change year-on-year Percentage change month-on-month
Clothing & Footwear -5.4 per cent 0.1 per cent
Furniture & Floorcovering -0.7 per cent -0.1 per cent
Electricals -1.9 per cent -0.7 per cent
DIY, Gardening & Hardware -1.1 per cent 0.0 per cent
Books, Stationery & Home Entertainment 2.6 per cent 0.1 per cent
Health & Beauty 1.0 per cent 0.7 per cent
Other Non-Food -0.4 per cent 0.1 per cent
Total Non-Food -1.4 per cent 0.1 per cent

Helen Dickinson, BRC chief executive, said shop price rises in food were in fact "relatively low", given how far input costs have climbed for retailers.

"Prices are undoubtedly on an upward trajectory, which we expect to gradually play out over the course of the year," Dickinson said.

Read more: Merkel doubles down: No parallel Brexit talks on divorce and future

"With the squeeze on household incomes tightening, the retail industry expects plans from the next government that put consumers first in Brexit negotiations, ensuring that ordinary shoppers are protected from the cost of unwanted new tariffs."

If the UK crashes out of the EU without any kind of trade deal, the trading of goods will be governed by World Trade Organisation rules.

Tariffs on various foods could rocket, and experts have warned that supermarkets would be forced to pass on the costs to consumers. For example, tariffs on Italian mozzarella and Irish cheddar cheese would jump 45.5 per cent and 44.1 per cent respectively.

However, a transitional trade arrangement remains elusive as European politicians have said they will not discuss a UK-EU trading relationship until a Brexit deal has been decided upon.

Related articles