The annual rate of shop prices increased by only 0.2% in June compared to 0.6% in May, thanks to TVs discounted for the Euros football tournament, with cheaper coffee and butter also helping. Food inflation continued to slow to 2.5% from May’s 3.2%, according to research firm NielsenIQ and the British Retail Consortium. Sainsbury’s reported strong grocery sales for the 16 weeks to 22 June, rising 3%, whereas its Argos arm saw sales drop thanks to weak consumer demand for electronics, especially gaming, and poor sales in garden equipment and outdoor furniture due to the soggy spring weather.
Helen Dickinson, the BRC’s chief, said in June, retailers took advantage of the Euros to sell televisions at reasonable prices. Non-food goods fell in price by 1%, more than May’s 0.8% decrease. NielsenIQ’s head of retail and business insight, Mike Watkins, said with uncertainty surrounding discretionary spending, tight competition in the marketplace would help to keep price increases low this summer.
Although spending on goods still costs more than what people paid before the pandemic and Russia’s invasion of Ukraine, price hikes will remain moderate due to tighter household spending. Experts predict a bumpy road ahead as increased logistics costs may be passed on to consumers. Since the Middle East conflict still influences trading in the Red Sea, a commonly used shipping route, which requires longer and more expensive routes, these costs could affect traders, limiting their intake of food supplies. Businesses relying on these routes should keep a close eye on goods prices.
Inflation rates have hit the Bank of England’s 2% target for the first time in May, and monster-size bank notes are now out of circulation. Interest rates have gone up as a result of trying to diminish consumer demand, regulating the prices of mortgages and rents. Nonetheless, inflation still occurs, and the prices of products and services are increasing steadily but at a slower pace. The Bank of England also took the election seriously, urging the winner to be aware of the major cost burden affecting the retail sector
Read the full article from The BBC here: Read More