Shop price inflation slowed in July in positive news for households, but growing pressures remain on the horizon, the industry has warned.
Shop prices are now 0.9% higher than a year ago, down from June’s 1.2%, according to British Retail Consortium (BRC)-NIQ figures.
Inflation on products other than food also fell to 0.2% from June’s 0.6%.
While food price inflation also fell to 2.2% from 2.4% a month earlier, fresh food inflation rose to 3.1% from June’s 2.8% in June.
However, shoppers benefited from deals on snacks and alcoholic drinks during the football World Cup, while clothing and footwear retailers offered significant discounts as they started clearing summer stock.
Some categories, including electricals and health and beauty, saw higher inflation as rising chip prices and manufacturing costs fed through.
BRC chief executive Helen Dickinson said: “Good news for households in July as shop price inflation slowed.
“Retailers competed hard to limit prices rises, with a wave of summer promotions across food and other goods.
“While today’s figures are encouraging, growing cost pressures remain on the horizon.
“Higher employment costs and packaging taxes, global instability and climate-related disruption all make it more expensive to get products onto shelves.”
Mike Watkins, head of retailer and business insight at NIQ, said: “Shop price inflation remains lower than a year ago, which will help shoppers as they manage other increases in household spend, such as energy and fuel.
“So, we can expect promotions to continue to be an important part of driving demand for the rest of the summer.”
