Non-food prices plummeting while food prices rise
Food prices continue to skyrocket, while non-food prices plummet, new figures have revealed.
The BRC-Nielsen Shop Price Index showed that food prices had risen by 1.4 per cent in May and 0.9 per cent in April, compared with a year ago.
On the other hand, non-food prices provided a strong contrast, falling by 1.5 per cent in May and 1.4 per cent in April, compared with the year before. Excluding last month, May had the shallowest rate of non-food deflation, however, since May 2013.
Across all categories, price deflation in May was at its slowest rate since November 2013, at 0.4 per cent.
British Retail Consortium chief executive Helen Dickinson (pictured) said: “Overall prices continue to fall year on year, albeit now at the slowest rate since November 2013. However, the trends for food and non-food are now two quite different stories.
“With shorter stock turnaround times, the impact of the weaker pound has already started feeding through into food prices, although food price inflation this month is still well below the input cost price increases being faced by retailers. By contrast, heavy discounting in the wake of a weak start to the year and the fact that some businesses are still protected by hedging contracts are keeping non-food prices deflationary for now.
“Nevertheless, we expect the general trend of inflation to be upwards over the course of the year, which will squeeze disposable income at a time when wage growth is slowing.”