Shop prices turned deflationary in June for the first time since October 2018, according to the latest BRC-Nielsen Shop Price Index.

Prices fell by -0.1%, compared to May when prices increased by +0.8%. Non-food prices recorded a decrease of -1.2% from the +0.2% increase in May – below the 12- and six-month average price declines of -0.6 and -0.3%, respectively.

Out of the non-food index categories, inflation eased for four, and the remaining three were deflationary. 

Shoppers’ finances have been under significant strain. Real income grew by just +1.1% over the year to April 2019, whereas there was negative real wage growth in six of the last nine years. Consequently, non-food retailers catering to discretionary demands have been bearing the brunt. In June, prices of clothing and footwear, furniture, electricals, DIY, and other non-food were all below the level of June 2015 prices.

Helen Dickinson OBE, BRC chief executive, says: “Shop prices fell for the first time since October 2018. While the overall fall in prices was small, and food inflation remains steady, it nonetheless represents a welcome break for consumers after several months of inflation. It is also a sign of the fierce competition between retailers, which has long kept prices low for British consumers. 

“However, a no-deal Brexit would hinder retailers’ abilities to continue to contain prices, as checks and delays would raise the cost of doing business. The October 31st deadline also comes at the worst possible time for retail – the height of preparations for Christmas and Black Friday, which are peak trading periods, threatening to cause disruption for consumers and businesses, and making further stockpiling of goods almost impossible. It is vital that the next PM reaches a deal with the EU and avoids the cliff edge.”