June saw a significant drop in shop price inflation, reaching its lowest level since October 2021.
- According to the BRC-NielsenIQ Shop Price Index, inflation decreased to 0.2% in June, down from 0.6% in May.
- Non-food items experienced deflation, dropping to -1% this June, an improvement from -0.8% the previous month.
- For the first time in nearly three years, UK inflation aligns with the Bank of England’s 2% target.
- Retailers’ strategic investments in operations and supply chains are credited for this development.
Inflation dipped notably in June, reaching the lowest point since October 2021. This decline reflects a 0.2% growth in shop prices, a drop from the 0.6% reported in May, and sits below the average three-month rate of 0.5%. Such statistics were outlined in the BRC-NielsenIQ Shop Price Index, highlighting key changes in the market.
Non-food items continued their trend of deflation, with prices falling to -1% in June, compared to -0.8% the month prior. This shift is notable as it also dipped below the three-month rolling average of -0.8%, offering consumers better bargains as retailers strive to boost sales through discounts.
UK inflation experienced a pivotal moment this June, matching the Bank of England’s 2% target for the first time in almost three years. This alignment signifies a significant economic event, potentially influencing future financial policies and household economics.
The British Retail Consortium attributes this positive turn to retailers’ substantial investments in optimising operations and supply chains. In response to the cost of living crisis, these enhancements have allowed businesses to mitigate the impact of global disruptions on input costs, thereby curbing potential price rises.
Helen Dickinson, Chief Executive of the BRC, commented on the situation: “During the height of the cost of living crisis, retailers invested heavily in improving their operations and supply chains. This is clearly paying off, with shop prices having risen just 0.2% over the past 12 months.” Her words underscore the strategic steps taken by retailers to stabilise market dynamics and alleviate consumer financial pressures.
The recent trends indicate a promising outlook for consumers as strategic retail investments continue to drive price stability.
