Seasonal clothing discounts keep shop price inflation steady in the UK

Summer discounting keeps shop price inflation stable according to latest figures by the British Retail Consortium (BRC): While overall shop price inflation held steady at 1.2 percent year-on-year in June, thus matching May's growth rate, despite the stability, this figure remains slightly higher than the three-month average of 1.1 percent.

“Overall shop price inflation was unchanged in June,” said Helen Dickinson, chief executive of the BRC, in a press release. “In clothing and general merchandise, retailers responded to the hot weather with promotions across summer essentials in clothing, footwear and lighter household textiles, despite overall non-food inflation rising.”

Inflation in check but mounting cost pressures for retailers

“While a competitive market is keeping inflation in check for now, retailers face mounting cost pressures, including higher National Insurance, the triple packaging tax and higher input costs from extreme weather and geopolitical tensions. To support the cost of living for households, government must reduce the costs of business. Starting with cutting the taxes and levies on energy bills would ease pressure on retailers and help keep prices down for customers,” she advises.

The steady headline rate hides contrasting trends between food and non-food categories. Non-food inflation ticked upward to 0.6 percent in June from 0.5 percent in May, pushing well past its three-month average of 0.3 percent. Conversely, general food inflation cooled to 2.4 percent from May's 2.7 percent, dipping below its three-month average of 2.7 percent.

Within the food category, performance diverged sharply based on product type. Fresh food inflation experienced a notable drop to 2.8 percent in June down from 3.4percent in May, falling below its three-month average. Meanwhile, ambient food inflation climbed to 1.9 percent from May's 1.6 percent, matching its three-month average perfectly.