By Matteo Castia
Prices at U.K. retail shops continued to fall in May, albeit at a lower pace than in previous months, according to the latest report by Nielsen IQ and the British Retail Consortium.
British retail prices decreased 0.6% year-on-year between May 3 and May 7, compared with a decline of 1.3% in April. Prices fell at the slowest pace since February 2020, the report found.
"It was another good month for consumers looking for bargains as prices fell again, albeit at a slower pace than last month," BRC Chief Executive Helen Dickinson said.
Nonfood deflation further decelerated in the period, with prices falling 0.8% on the year, compared with a drop of 1.7% in April and marking the slowest fall since May 2019, according to the report.
"While clothing and footwear prices continued to fall in May, the pick-up in demand once social restrictions lifted meant this drop was smaller than in previous months," Ms. Dickinson said.
Food prices fell at a slower rate too, with a 0.3% decline in May which compares with a deflation of 0.6% the previous month, the report said.
"Supermarkets fought hard to maintain market share and please thrifty customers by keeping prices low," Ms. Dickinson said. The report found that May was the second consecutive month of food prices losing ground.
Still, consumers may not be able to enjoy depressed prices for long as costs are mounting for retailers, Nielsen IQ and the BRC warned.
"Global food prices are currently at their highest in seven years, shipping costs have risen threefold since 2019, and commodity prices are climbing. We will likely see these costs filter through in the second half of this year, and with the additional Brexit red-tape this autumn, retailers may be forced to pass on some of these costs onto their customers," Ms. Dickinson said.
Write to Matteo Castia at matteo.castia@dowjones.com
By Matteo Castia
Prices at U.K. retail shops continued to fall in May, albeit at a lower pace than in previous months, according to the latest report by Nielsen IQ and the British Retail Consortium.
British retail prices decreased 0.6% year-on-year between May 3 and May 7, compared with a decline of 1.3% in April. Prices fell at the slowest pace since February 2020, the report found.
"It was another good month for consumers looking for bargains as prices fell again, albeit at a slower pace than last month," BRC Chief Executive Helen Dickinson said.
Nonfood deflation further decelerated in the period, with prices falling 0.8% on the year, compared with a drop of 1.7% in April and marking the slowest fall since May 2019, according to the report.
"While clothing and footwear prices continued to fall in May, the pick-up in demand once social restrictions lifted meant this drop was smaller than in previous months," Ms. Dickinson said.
Food prices fell at a slower rate too, with a 0.3% decline in May which compares with a deflation of 0.6% the previous month, the report said.
"Supermarkets fought hard to maintain market share and please thrifty customers by keeping prices low," Ms. Dickinson said. The report found that May was the second consecutive month of food prices losing ground.
Still, consumers may not be able to enjoy depressed prices for long as costs are mounting for retailers, Nielsen IQ and the BRC warned.
"Global food prices are currently at their highest in seven years, shipping costs have risen threefold since 2019, and commodity prices are climbing. We will likely see these costs filter through in the second half of this year, and with the additional Brexit red-tape this autumn, retailers may be forced to pass on some of these costs onto their customers," Ms. Dickinson said.
Write to Matteo Castia at matteo.castia@dowjones.com
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UK Retail Prices Continued to Decline in May - MarketWatch
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