(Sharecast News) - Prices at UK tills fell again in May, according to figures from the British Retail Consortium on Tuesday, though food inflation picked up for the fourth straight month amid rising concerns that customers are beginning to feel the effects of increased costs for retailers.
Annual shop price deflation was unchanged at -0.1% for the second straight month, following a 0.4% year-on-year decline in prices in March and a 0.7% drop in February.

While non-food prices were down 1.5% on last May, compared with a 1.4% decline in April, food inflation accelerated to 2.8% from 2.6%.

Ambient food price inflation eased to 3.3% from 3.7%, but fresh food inflation jumped to 2.4% from 1.8%.

"Fresh foods were the main driver [of rising food price inflation], and red meat eaters may have noticed their steak got a little more expensive as wholesale beef prices increased," said Helen Dickinson, chief executive of the BRC.

Non-food prices remained in deflation, but this slowed in categories such as fashion and furniture as retailers began to unwind heavy promotional activity. Prices were falling faster for electricals as retailers tried to encourage spending before any potential knock-on impact from U.S. tariffs."

Dickinson said it was "no surprise that inflation is rearing its head once again", with retailers having been hit with £5bn in additional costs from increased employer contributions for National Insurance and a higher National Living Wage that kicked in last month. What's more, further cost increases are on the horizon with a new packaging tax and Employment Rights Bill due to kick in later in the year.

"Government must ensure the Employment Rights Bill is fit for purpose, supporting workers' rights while protecting jobs and investment for growth. If statutory costs continue to rise for retailers, households will have to brace themselves for more difficult times ahead as prices rise faster," Dickinson said.

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