The BRC-Nielsen Shop Price Index is a monthly measure of UK shop price inflation. The SPI measures changes in the price of 500 of the most commonly bought items. The report demonstrates the extent to which retailers contribute to inflation through the pricing of commonly bought goods. Here are the key findings for May 2021:
Summary:
- Shop Prices fell by 0.6% year-on-year in May, a slower decline than April’s decrease of 1.3%. This is the slowest rate of decline since February 2020.
- Non-Food deflation continued to slow in May, with prices falling by 0.8% compared to a decline of 1.7% in April. This is the slowest rate of decline since May 2019.
- Food deflation eased to 0.3% in May from April’s decline of 0.6%. This is the second consecutive month when Food prices fell.
- Fresh Food prices fell for the sixth consecutive month in May, although deflation slowed to 1.0% in May from 1.5% in April.
- Ambient Food inflation accelerated to 0.7% in May up from 0.6% in April. This is below the 12- and 6-month average price increases of 2.0% and 1.5%, respectively.
Commentary:
Helen Dickinson OBE, Chief Executive, British Retail Consortium, said:
“It was another good month for consumers looking for bargains as prices fell again, albeit at a slower pace than last month. While clothing and footwear prices continued to fall in May, the pick-up in demand once social restrictions lifted meant this drop was smaller than in previous months. Furniture and electricals saw prices rise as retailers felt the lingering impact of global supply chain disruption from earlier this year. Meanwhile, supermarkets fought hard to maintain market share and please thrifty customers by keeping prices low.
“However, cost pressures are bearing down. Global food prices are currently at their highest in seven years, shipping costs have risen threefold since 2019, and commodity prices are climbing. We will likely see these costs filter through in the second half of this year, and with the additional Brexit red-tape this Autumn, retailers may be forced to pass on some of these costs onto their customers. Government can help to ease the burden on British consumers by finding ways to minimise the impact of new checks and documentation required from October.”
Mike Watkins, Head of Retailer and Business Insight, NielsenIQ:
“Consumers will be seeing the impact of higher energy and fuel costs in household bills and whilst some cost price increases are coming through the supply chain, this is not yet enough for shop price inflation to return. With high street retailers continuing to offer price reductions and supermarkets promoting seasonal food and drink, this is helping to offset cost of living increases.”
As a member of the BRC, the MIA can share the full report with our members. If you would like to see the full report, please contact alice@mia.org.uk
