Shop prices fall 2.8% in second year of deflation

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Non-food sector prices fell for the 14th consecutive month in May.

Prices on the British high street fell for the 14th consecutive month in May registering a 2.8% deflation in the non-food sector compared to 2.7% in April, according to the British Retail Consortium (BRC) and Nielsen’s Shop Price Index.

Overall prices registered a 1.4% decline across all sectors.

The new figures throw news of a gradual rise out of the recession into sharp focus, with some claiming the continued recovery is not putting enough pressure on price tags.

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British Retail Consortium director general Helen Dickinson, said: "May has seen shop price deflation remain unchanged at 1.4 per cent, the thirteenth consecutive month of deflation. We’ve also past the fourteenth consecutive month of non-food deflation, mainly as the result of good bargains in categories popular with consumers in summer months such as clothing and footwear.”

The only category to buck the trend was food, with prices rising just 0.7% – the lowest level since records began. Clothing and footwear prices dropped 11.4% in the last year alone, with electrical dropping 3.2%.

Mike Watkins, head of retailer and business insight at Nielsen, said: "Little in the way of immediate seasonal or weather related price increases is anticipated so the outlook for the next three months is for relatively stable shop price inflation. Helped by the increases in consumer confidence since the start of the year, this should encourage shoppers to spend more freely over the summer months."

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