Shop prices fall to lowest level of 2023 driven by wet weather and discounting on clothing and footwear

Annual shop price inflation decelerated to 7.6% in July, down from 8.4% in June, the lowest level of 2023 so far - with retailers turning to larger discounts on clothing and footwear amid the wet weather.

Non-food inflation decelerated to 4.7% in July, down from 5.4% in June. That is below the three-month average rate of 5.3%, and the lowest level since December 2022, according to the latest monthly data from the BRC-NielsenIQ Shop Price Index.

Helen Dickinson, Chief Executive of the British Retail Consortium (BRC), said: “Shop price inflation fell to its lowest level of 2023 and, for the first time in two years, prices fell compared to the previous month. Leading the cuts was clothing and footwear, where retailers mitigated wet weather with larger discounts.”

Despite the fall in price inflation, Dickinson said retailers are continuing to work hard to keep falling prices on track, but she once again urged the Government to “play its part and freeze business rates from next April, or else risk adding a £400m additional pressure on prices.”

Mike Watkins, Head of Retailer and Business Insight at NielsenIQ, added: “The summer holiday period should help discretionary spend a little and, whilst inflation remains high, the outlook is improving.

“Shoppers continue to change how they shop as part of their coping strategies. This includes shopping at different retailers, buying lower priced items, delaying spend or only buying when there are promotions. This behaviour looks set to continue.”