LONDON (Reuters) - British shop prices fell in early June for the first time since October last year, an industry survey showed, offering a bit of relief for consumers whose spending has helped the economy during the Brexit crisis.
The British Retail Consortium (BRC) and market research group Nielsen said shop prices fell by 0.1% in annual terms, pushed down by non-food prices, compared with a 0.8% increase in May.
“While the overall fall in prices was small, and food inflation remains steady, it nonetheless represents a welcome break for consumers after several months of inflation,” said Helen Dickinson, the BRC’s chief executive.
Moderate inflation and rising wages have encouraged households to spend even as they remain worried about the outlook for the economy ahead of Brexit. However, there have been signs recently that consumers have turned more cautious.
The BRC said competition between retailers was also helping households. Prices of clothing and footwear, electrical and other non-food brands were below June 2015 levels, it said.
The BRC warned about a possible hit to the industry from Britain’s new Brexit deadline.
“The Oct. 31 deadline also comes at the worst possible time for retail – the height of preparations for Christmas and Black Friday, which are peak trading periods, threatening to cause disruption for consumers and businesses, and making further stockpiling of goods almost impossible,” Dickinson said.
Tesco (TSCO.L), Britain’s biggest retailer, warned last month that preparing for a possible disorderly no-deal Brexit in October would be far more problematic than preparations it made for the original planned departure date in March.
Reporting by Navdeep Yadav; Editing by William Schomberg