Lower in-store prices won’t last, says BRC-NielsenIQ
The drop in in-store prices is unlikely to last, says BRC-NielsenIQ in its latest price index, covering June 2021.
It reports that in-store price deflation accelerated to -0.7% yoy in June from the -0.6% decline in May, while non-food deflation accelerated to – 1.0% in June, compared to a decline of -0.8% in May.
Helen Dickinson OBE, Managing Director of the British Retail Consortium, said: “There is good news for consumers as overall prices in June fell at a slightly faster pace than last month. Non-food prices, especially in fashion, have remained deflationary as companies try to prolong the recent pick-up in consumer spending. Food prices have also fallen, testifying to the fact that supermarkets are struggling to keep prices low for their customers.
“Meanwhile, retailer costs continue to rise due to rising global food prices, Brexit bureaucracy, Covid-related supply chain disruption, raw material shortages and increased shipping and gasoline costs. The growing cost burden on retailers could be passed on to the consumer, threatening to increase prices as the pressure increases in the coming months, especially with additional Brexit controls this fall. The government must help minimize the cost impact to consumers by ensuring that new controls and documentation requirements this fall avoid adding further friction to importing goods. “
Mike Watkins, Head of Retail and Business Insight, NielsenIQ, adds: “The fact that store prices remain in negative territory despite the recent CPI hike is indicative of the competitive landscape for retail in the UK. United and keeping prices low for as long as possible is good news for buyers. However, with four in 10 shoppers watching their spending more than before the pandemic, this suggests that several million households will see their budgets cut if prices start to rise. ”