Goods prices declined for the 61st month in a row in May, increasing the gap between food prices and prices for all other goods.
According to the latest report from the British Retail Consortium, overall shop prices fell by 1.1 percent in May in year-on-year terms, with prices of non-food items seeing their biggest fall since August 2016. Food prices increased again, however, up 1.2 percent from the 1 percent rise seen in April.
“While food inflation has increased this month as the weather, oil price and other geo-political factors have influenced global agricultural markets, we expect overall prices to fall in the coming months,” BRC chief executive Helen Dickinson said.
“Retailers’ overall sales revenues are under pressure from falling prices and this comes at the same time as business rates and other public policy decisions are pushing up operating costs, leaving retailers squeezed at both ends,” she said.
“The consequences of which have been plain to see.”
Consumers have suffered from an increasing inflation rate since June 2016’s decision to leave the EU, putting a further squeeze on incomes as wages fall in real terms.
The news come just after the latest report from Kantar Worldpanel showed a strong performance from the UK grocery market, with hot weather boosting supermarket sales by 2.7 percent.