Desperate discounting from retailers hit by yet more poor weather last month pushed the high street into outright deflation for the first time in three and a half years, the British Retail Consortium said yesterday.
Prices were 0.1 per cent lower than a year ago in the coldest May since 1996, as clothing stores were forced to cut prices on spring ranges.
Promotions were also rife among home furnishings and furniture sectors particularly hard hit by the squeeze on household incomes, the BRC added. This led to prices among non-food retailers sliding 1.5 per cent year on year, the sharpest fall since June 2009. Meanwhile wheat prices eased from last July's five-year high amid predictions for strong global harvests, bringing food price inflation down to 2.4 per cent, the organisation added.
The figures, coming a day after the BRC reported a 1.8 per cent rise in like-for-like sales, suggest that consumers are willing to spend but only when the price is right. Helen Dickinson, the director general, said retailers were "doing what they can to offer customers the best possible value".