Shop price inflation slowed in July, offering consumers some relief after months of persistent cost pressures, although retailers warned that rising business costs and global uncertainty could drive prices higher later this year.
According to the British Retail Consortium (BRC)-NIQ Shop Price Index, annual shop price inflation eased to 0.9 per cent in July from 1.2 per cent in June.
Non-food inflation also moderated, falling to 0.2 per cent, as retailers rolled out widespread summer discounts to stimulate demand.
The slowdown was driven in part by promotions on snacks and alcoholic drinks during the football World Cup, while clothing and footwear chains cut prices to clear seasonal stock. The discounting helped offset continued price increases in categories such as electrical goods and health and beauty products, where higher semiconductor costs and manufacturing expenses continued to filter through to consumers.
Food inflation also edged lower, slipping to 2.2 per cent from 2.4 per cent the previous month. However, fresh food inflation accelerated to 3.1 per cent, underlining the uneven nature of pricing pressures across grocery categories.
Helen Dickinson, chief executive of the British Retail Consortium, said retailers had competed aggressively to keep prices in check but cautioned that the improvement could prove temporary.
She warned that higher employment costs, packaging taxes, geopolitical instability and climate-related disruption were all increasing the cost of getting goods onto shop shelves.
Mike Watkins, head of retailer and business insight at NIQ, said inflation remained well below last year’s levels, providing some relief for households already facing higher energy and fuel bills. He added that promotional activity is likely to remain central to retailers’ strategies throughout the remainder of the summer as businesses compete for increasingly price-conscious consumers.
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