MNI DATA IMPACT: UK Shop Prices Pick Up In May

--BRC-Nielson Shop Price Index +0.8% y/y in May

     LONDON (MNI) - UK consumers saw prices rise in May as retailers passed on

higher costs, the BRC-Nielson Shop Price Index published Wednesday showed.

--Retailers have been reeling under the pressures of volatile demand, intense

competition and higher costs coming from currency weakness, stockpiling costs

and rising minimum wages. With some retailers unable to absorb them any longer,

cost price increases appeared this month.

-In May, UK Shop Price inflation accelerated to 0.8% y/y from 0.4% in April, the

second highest rate in six years. On monthly basis, price inflation was up 0.2%

after declining by 0.5% in May.

-The increase in overall prices were led by the Non-Food sector, with inflation

rising to 0.2% on the year compared with a decline of 0.6% last month, above

both the 12- and six-month average price decline of 0.6 and 0.2%, respectively.

-Sectors like Furniture and Health and Beauty increased prices following years

of discounting. In contrast, Electrical and Clothing continued to discount amid

severe competition.

- Food inflation continued to decelerate for the second consecutive month after

hitting a 64-month high in March. In May, food inflation was up 1.8% on the year

compared with 2.2% in April. This is above the 12-month average price rise of

1.7%, but below the six-month average price increase of 1.9%.

--MNI London Bureau; tel: +44 203-586-2224; email: shaily.mittal@mni-indicators.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com