The latest BRC-NielsenIQ Shop Price Index shows annual shop price inflation slowed to 0.2% in June, down from 0.6% in May and below the three-month average rate of 0.5%.
Food inflation decreased to 2.5% in June, down from 3.2% in May, and was below the three-month average of 3%. This also marked the fourteenth consecutive declined in food.
Fresh food inflation saw a slowdown to 1.5% in June, down from 2% the previous month.
Meanwhile, ambient food dropped to 3.9% in June compared with 4.8% in May. This was below the three-month average of 4.5%.
Non-food continued to deflate at -1% in June, down from -0.8% in May, which was below the three-month average deceleration of -0.8%.
BRC chief executive Helen Dickinson said: “During the height of the cost of living crisis, retailers invested heavily in improving their operations and supply chains to compensate for the impact of global shocks on input costs.
“This is clearly paying off, with shop prices having risen just 0.2% over the past 12 months. Food inflation is now lower than any time since 2021 helped by falling prices for key products such as butter and coffee.
“Meanwhile, non-food prices went deeper into deflation as retailers tried to drive sales by discounting. This was particularly true for TVs with great deals to capitalise on the Euros fever.
“Whoever wins Thursday’s election will benefit from the work of retailers to cut their costs and prices, easing the cost of living for millions of households.
“The last few years should serve as a warning that where business costs rise significantly, consumer prices are forced up too.
“The next Government must address some of the major cost burdens weighing down the retail industry, including the broken business rates system, and inflexible apprenticeship levy.
“By doing so, retailers can invest in lower prices for the future – helping to reduce the cost of living pressures that many families face.”