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 July 2021:
- Shop Price deflation accelerated to 1.2% year-on-year in July compared to June’s decrease of 0.7%. This is a slower rate of decline than the 12- and 6-month average price decreases of 1.6% and 1.4%, respectively.
- Non-Food deflation accelerated to 1.8% in July, compared to a fall of 1.0% in June. This is a slower rate of decline than the 12- and 6-month average price declines of 2.8% and 2.2%, respectively.
- Food deflation accelerated to 0.4% in July from June’s deflation of 0.2%. This is the fourth consecutive month when Food prices fell. This is below the 12- and 6-month average price changes of 0.4% and -0.2%, respectively.
- Fresh Food prices fell for the eighth consecutive month in July, with deflation accelerating to 1.0% in July from 0.7% in June. This is below the 12- month average price growth rate of -0.5% and in line with the 6-month average price growth of -1.0%.
- Ambient Food inflation eased to 0.5% in July, down from 0.6% in June. This is the lowest rate of inflation for the category since January 2017. This is below the 12- and 6-month average price increases of 1.7% and 1.0%, respectively.
Helen Dickinson OBE, Chief Executive, British Retail Consortium, said:
“UK consumers will be pleased to see another month of falling prices at the checkout. Annual prices in July fell at a faster rate than the previous month due to fierce competition between supermarkets keeping food prices low, and the steeper fall in non-food prices. With the reopening of some holiday destinations and other recreational activities, consumers broadened their spending to include more leisure and travel. In response, non-food retailers, particular fashion businesses, have been working hard to keep consumer appetite alive with summer sales.
“Unfortunately for consumers, low prices may not last forever. Recently, retailers have faced huge cost pressures as a result of rising costs of shipping, haulage and petrol as well as frictions from exiting the EU. The additional paperwork and physical checks on EU imports in October and January may push prices up in the long-term. Government should do all it can to minimise the impact on consumers by reducing any further frictions and costly delays where it can.”
Mike Watkins, Head of Retailer and Business Insight, NielsenIQ:
It’s an uncertain time for many households as the economy slowly reopens and recent NielsenIQ research shows 41% of all shoppers are watching their spend more than they did before the pandemic. So, it’s important that retailers continue to keep prices low especially as the increase in CPI is likely to lead to different shopping behaviours to help pay for the other increases in household spend.
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