Shop prices tumble as fashion and furniture retailers increase discounts
Shoppers saw the price of goods tumble further last month as clothing and furniture retailers increased discounts to pull in customers and offset the impact of coronavirus, according to new data.
The BRC-Nielsen shop price index for May revealed that prices slid by 2.4% in May, following a 1.7% decline in April.
Experts said the fall in prices was driven by non-essential retailers, who were forced to shut their doors in March due to the coronavirus pandemic.
Helen Dickinson, chief executive of the British Retail Consortium (BRC), said: “Shop prices in May fell at their fastest rate since 2006, which was largely driven by the drop in non-food prices.
“Clothing and furniture saw the biggest drop as retailers ran promotions to encourage consumer spending and attempted to mitigate recent losses.”
Non-food retailers saw prices slide by 4.6% in May – the sharpest decline since December 2006 – compared to a decline of 3.7% in April.
Meanwhile, food inflation also slowed down, easing to a 1.5% increase from 1.8% in April.
Fresh food prices also moved marginally higher, with inflation slowing to 0.5% from 1% in the previous month.
Ms Dickinson added: “Year-on-year food prices increased slightly due to higher business costs, implementing social distancing measures and the upward pressure from labour shortages, but were down on the previous month as more home-grown produce became available.
“We expect to see continued upward pressure on food prices from the effects of the pandemic in the coming months, while non-food prices are likely to remain deflationary with subdued sales.”
Mike Watkins, head of retailer and business insight at Nielsen, said: “With the retail industry coping with store closures and social distancing limitations, it’s no surprise to see shop price inflation slowing in recent weeks.
“Across the major supermarkets with sales growths in high single digits in May, the consumer spend on promotions has also been at an all-time low, but there has been little upwards pressure on prices.
“However, as we move towards summer with the importance of seasonal foods and with the supply chain still disrupted, we can anticipate some volatility in prices.”