Prices in shops slowed to 0.6% during May, a drop from 0.8% versus the previous month and below the three-month average rate of 0.9%.
This was helped by the prices of both food and non-food products dipping, according to the British Retail Consortium’s (BRC’s) research.
For food products, the prices decelerated to 3.2%, which is under the three-month average of 3.5%, marking its lowest rate since February 2022.
Meanwhile, fresh food inflation fell from 2.4% in April to 2% in May. Much like the increase in shop prices as a whole, this marked the lowest rate since November 2021.
In the non-food sector, prices continued to deflate to -0.8%, compared to -0.6% in April.
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It follows last month’s transition of shop prices moving to a “more manageable” level, as inflation as a whole also slowed down.
Last week, the Consumer Prices Index (CPI) measure of inflation improved to 2.3% for the year to April 2024, described as a “step in the right direction”, thanks to a big fall in energy prices.
‘Vital all parties detail support for customers and retailers’
Helen Dickinson, chief executive of the BRC, believes that whichever party wins the election, there needs to be Government support for the “key part” retailers are doing as inflation continues to trickle.
Dickinson said: “Retail plays a key role in every part of the country, from the smallest village to the largest city, employing millions of people, and serving millions more.”
“As the cost burden of new policies rises – from business rates to packaging taxes – this affects not just the businesses, but their customers too. With an election in a matter of weeks, it is vital that parties detail their support for customers and retailers in their upcoming manifestos.”
Mike Watkins, head of retailer and business insight at NielsenIQ, added: “After a number of months of falling input prices, we are now seeing food inflation stabilise and retailers continue to pass on price cuts to shoppers.
“Across the industry, whilst inflationary pressure has eased and there is some improvement in shopper sentiment, the unseasonable weather has dampened retail sales, so lower prices look set to continue and promotional activity is likely to increase drive demand.”
