The British Retail Consortium said that food prices continued to rise across the UK in June, as a four-year deflationary trend appears to be coming to an end.
Overall shop price deflation was 0.3% in June, a slight deceleration from the 0.4% fall recorded in May, the group said. This is the shallowest deflation rate since November 2013.
Food prices specifically rose by on average 1.4% in June, which was in line with the 1.4% increase in May, which was the highest level recorded since January 2014. Fresh food prices were 1.4% higher, which is the highest rate of increase since February 2014.
Upwardly Mobile
"The year on year numbers belie the fact that prices have been heading upwards for the last six months; it’s just that significant deflation in the second half of 2016 means there has been considerable ground to make up in the year on year figures," commented Helen Dickinson, British Retail Consortium chief executive.
“Although heading upwards, the speed of price increases was checked in June. Food price inflation was steady on last month, albeit in firmly positive territory; whilst varied performances in the non-food categories netted out to a slight reduction in deflation."
Cost Pressures
Dickinson noted that cost pressures faced by retailers continue to mount, driven by both market increases in the underlying cost of goods and as a result of government policies.
"There is a limit to the ability of retailers to protect consumers by absorbing these impacts into their margins, as a result further price increases are inevitable," she said.
"With that in mind and with the UK’s trading relationships under discussion, it’s of the utmost importance that the Government does all it can to limit any further cost increases that could further adversely impact the finances of the UK’s consumers.”
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
