UK shop prices fall for 25th straight month and fresh food hits record low

Prices in Britain's shops fell for the 25<sup>th consecutive month in May 2015 as price wars in all sectors help keep costs low, according to new data.

The British Retail Consortium (BRC) and Nielsen's Shop Price Index for May shows that shop prices in all categories were down by 1.9% - slightly beating the 12 month average of 1.8% deflation.

Food price deflation maintained its record low of 0.9% for the third month in a row whereas non-food costs were down by 2.9%.

BRC Director General, Helen Dickinson, said: "Food prices remained at their record low for a third consecutive month, with low priced fresh food helping to keep prices down. We've now had five consecutive months of food prices falling. While ambient food saw a small rise, fresh food hit a new record low.

"Now that the General Election has taken place, government policy is likely to advance rapidly. A number of areas will obviously require consideration, not least, ensuring that the structural review of business rates remains ambitious and far-reaching. This is vitally important for retailers who are presently burdened with above inflation operating costs."

Mike Watkins, head of retaile and business insight at Nielsen, added: "Retailers continue to use price cuts and promotions to stimulate sales which is helping to maintain shop price deflation, and we see little evidence to suggest that prices will rise in the near future. With many food retailers still using price cuts to attract new shoppers, this is lowering the cost of the weekly shop and so the overall CPI figure in the UK. Deflation and price led competition will continue to be a key driver of sales growth for some time yet."