You are here: Home - Household Bills - News -

Better times for the consumer as shop prices fall?

0
Written by:
02/08/2017
Consumers can breathe a short-term sigh of relief, as shop prices fall at a faster rate, but pressures are expected to re-emerge towards the end of this year.

Overall shop price deflation was 0.4%, a slight increase in deflation from the 0.3% June figure.

The decrease was driven by falling food inflation, which slowed to 1.2%, from 1.4% in both June and May.

Helen Dickinson, chief executive of the British Retail Consortium attributed the decline to the weakening effects of sterling depreciation. She said: “Shorter stock cycles in fresh food mean that more of the impact of the currency depreciation fed through into inflation earlier in the year and hence it is now subsiding. However, the upward pressure on food inflation has not entirely disappeared. Ambient (shelf-stable) food prices are still affected and as seasonal pricing dynamics play out, we could see fresh food inflation pick up again.”

Non-food prices decreased by 1.5% in July, compared to the June decrease of 1.4%. Dickinson said: “While in many cases retailers’ new ranges are coming in at higher price points in response to the increased cost of importing goods, other core products are seeing reductions in prices, as retailers compete to keep prices low for consumers where they can. For now, these dynamics are keeping overall non-food inflation low, although strong upward pressures remain.” She believes these falling prices will start to reverse in the latter part of the year.

Mike Watkins, head of retailer and business insight, Nielsen, said: “The amount of inflationary pressure coming from retail remains less than from other elements of the economy and in the last few weeks, while we have seen a return to more normal weather, the level of consumer demand remains unpredictable. This means retailers are cautious about passing on price increases, in particular at key retail price points. So promotional activity is still an important stimulant of demand as consumers become more cautious in the face of higher living costs.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Everything you need to know about being furloughed

Few people had heard of ‘furlough’ before March 2020, but the coronavirus pandemic thrust the idea of bein...

Coronavirus and your finances: what help can you get in the second lockdown?

News and updates on everything to do with coronavirus and your personal finances.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

  • @YourMoneyUK I will be travelling to UK from Gran Canaria and im in reciept of pension credit, am i eligible for this payment?
  • Unclaimed money scheme expanded to aid Covid recovery: https://t.co/lQgBdlQJE0 @YourMoneyUK
  • RT @thenutmegteam: Keeping on top of your pension now could well pay dividends in the future. ⏳ Nutmeg's savings and investments specialis…

Read previous post:
A fifth of low income interest-only borrowers don’t understand product

One in five low income interest-only borrowers do not understand the need to repay capital or appreciate the risk they...

Close