Shop price inflation withered away to almost nothing in June with the latest BRC-NielsenIQ Shop Price Index showing a year-on-year reading of just 0.2%.

That was down from 0.6% in May and below the three-month average rate of 0.5%. Shop price annual growth was its lowest since October 2021.

And in fact, non-foods remained in deflation with prices down as much as 1% in June on top of a 0.8% fall in the preceding month. 

The price of food is still rising above the Bank of England’s 2% target (food was up 2.5% last month) with non-foods clearly important in pulling back the average figure.

Mike Watkins, Head of Retailer and Business Insight at NielsenIQ, said: “Shop price inflation is still slowing and this will be of help to shoppers as they plan their household budgets for essential goods and services. And with uncertainty around discretionary spending, we expect the intense competition across the marketplace to keep price increases as low as possible this summer.”

And British Retail Consortium CEO Helen Dickinson explained that “during the height of the cost of living crisis, retailers invested heavily in improving their operations and supply chains to compensate for the impact of global shocks on input costs. This is clearly paying off. Food inflation is now lower than any time since 2021 helped by falling prices for key products such as butter and coffee. Meanwhile, non-food prices went deeper into deflation as retailers tried to drive sales by discounting. 

“Whoever wins Thursday’s election will benefit from the work of retailers to cut their costs and prices, easing the cost of living for millions of households. The last few years should serve as a warning that where business costs rise significantly, consumer prices are forced up too. The next Government must address some of the major cost burdens weighing down the retail industry, including the broken business rates system, and inflexible apprenticeship levy. By doing so, retailers can invest in lower prices for the future – helping to reduce the cost of living pressures that many families face.”