–UK BRC July Shop Prices Up 1.5% y/y, Same As In June
–UK BRC July Shop Prices Down 0.1% m/m, Same As In June
–UK BRC July Food Prices Up 2.5% y/y; Non-Food Up 1.0% y/y

LONDON (MNI) – Overall UK shop price inflation fell for the third
consecutive month in July, with deflation in some subsectors forcing
non-food inflation to its lowest level since November 2009, according to
the British Retail Consortium-Nielsen Shop Price Index (SPI).

The BRC Shop-price index rose 1.5% year-on-year in July, the same
as in June. On a monthly basis, shop prices fell 0.1% in July, the same
rate of decrease as in June.

Food prices rose 2.5% on the year in July, versus a 1.7% increase
in June. Non-food prices increased by 1.0% in July, markedly lower than
the 1.4% increase in the prior month and the weakest outturn since
November.

In the non-food category, the clothing and footwear and electrical
goods and books sectors experienced steeper deflation in July than in
June. Prices in clothing and footwear fell 1.2% year-on-year versus a
0.1% drop in June. In the electrical sector, prices fell 2.5% on the
year against a 2.0% drop in the month prior.

Furniture and floorcovering prices dropped 0.4%, returning to
deflation for the first time since November 2009.

Deflation in the books, stationary and home entertainment sector
slowed a little, with prices dropping 0.6% in July versus a 0.8% fall in
the month prior.

As for food prices, fresh food prices rose 1.4% year-on-year, up
from 0.1% in June. Ambient food inflation was unchanged from June’s rate
of 4.1%.

In monthly terms, food prices rose 0.8% against a 0.1% fall prior.

The BRC said that shop prices remained stable due to aggressive
discounting in the non-food sector outweighing price rises in the food
sector.

But BRC Director General Stephen Robertson warned that heatwaves in
Russia and Canada could put pressure on overall food inflation in the
coming months.

“The recent dry weather has increased the price of animal feed and
poor harvests have reduced some fruit crops,” he said.

Commenting on the data, Mike Watkins, Senior Manager, Retailer
Services, Nielsen said:

“Despite some attractive and short term offers for the World Cup
there was little sustainable sales growth for food retailers and with
shoppers indicating that they are becoming more cautious about spending
both food and non-food retailers are continuing to focus on delivering
price cuts and re-enforcing this with value for money promotions.”

–London newsroom: 4420 7862 7491; email: wwilkes@marketnews.com
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