By Michael Susin
Annual U.K. shop-price inflation eased further in June for the 14th consecutive month, helped by slowing food inflation as the rate returned to the same levels observed in 2021, according to a report published Tuesday.
Price inflation at U.K. stores eased to 0.2% on year in June from 0.6% in May, below the three-month average rate of 0.5%, the report by NielsenIQ and the British Retail Consortium showed. This is the lowest level since October 2021.
Food inflation--the segment most affected by the cost-of-living crisis over the past two years--decelerated to 2.5% from 3.2% a month earlier, helped by prices for key products such as butter and coffee, BRC Chief Executive Helen Dickinson said.
This drop reflects retailers' investment in operations and supply chain in order to mitigate the hike on input costs, Dickinson said, noting that food inflation is now lower than any time since 2021, prior to the surge in the cost of living.
The non-food segment remained in deflation, with prices decreasing at minus 1% compared with minus 0.8% the prior month as retailers tried to boost sales through discounting, particularly with TV deals to capitalize on European sports events, she added.
Mike Watkins, NielsenIQ's head of retailer and business insight, said intense competition across discretionary spending is expected to keep price increases as low as possible this summer.
Write to Michael Susin at michael.susin@wsj.com
(END) Dow Jones Newswires
07-02-24 0044ET
