Fresh food price inflation remained at 0.9% this month, despite overall shop prices experiencing their 61st month of deflation, according to the latest BRC-Nielsen shop price index.

Overall shop price deflation fell by 1.1% in May when compared to the same period in 2017, with non-food prices decreasing by 2.5%.

However, food inflation picked up in May with prices increasing by 1.2%, a higher rate than 1% in the previous month. Ambient food inflation also accelerated to 1.2%, up from 0.6% in March.

British Retail Consortium chief executive Helen Dickinson OBE said: “Overall shop prices fell again in May as the impact of the pound’s fall following the EU referendum reduces and the challenging retail environment continues to mean retailers must compete on price. While food inflation has increased this month as the weather, oil price and other geo-political factors have influenced global agricultural markets, we expect overall prices to fall in coming months.

“Retailers’ overall sales revenues are under pressure from falling prices and this comes at the same time as business rates and other public policy decisions are pushing up operating costs; leaving retailers squeezed at both ends. The consequences of which have been plain to see.”

Nielsen’s head of retailer and business insight Mike Watkins said: “Despite a small increase in food prices in recent weeks, shop price inflation remains below the Consumer Price Index and the recent summer weather has lifted food sales. In contrast, we are seeing further deflation in the non-food channel and there has been little momentum in retail sales. With continued increases in crude oil prices now adding further cost to the supply chains and weak demand on the high street, retailers need to be cautious about passing on any price increases over the next few months. The good news is after a difficult couple of months, shoppers now seem to be spending again.”