UK shop prices increased for the first time in more than five years in August, the British Retail Consortium said Wednesday.
Shop prices edged up 0.1 percent in August, following a 0.3 percent drop in July. This broke a deflation cycle of 63 months, BRC said.
Higher food price inflation as well as lower non-food price deflation contributed to the return of shop prices to inflation. Nonetheless, shop price inflation remained well below the headline consumer price inflation.
Data showed that non-food deflation continued to ease in August, to 1 percent from 1.4 percent in July. This was the lowest rate of deflation since April 2013.
Lower non-food price deflation has been driven by a shift by a number of retailers in their approach to promotional activity, while robust demand for summer products reduced the need for discounting on these lines.
At the same time, food inflation accelerated to 1.9 percent from July’s 1.6 percent due to hot, dry weather this summer.
“Despite significant increases in costs in the supply chain, this month’s figures show that retailers are keeping price increases faced by consumers to a minimum,” Helen Dickinson OBE, chief executive at BRC said.
“However, current inflationary pressures pale in comparison to potential increases in costs retailers will face in the event the we leave the EU without a deal,” Dickinson added.