–Deflation at U.K. retail stores slowed to 1.3% on year in April from 2.4% in March

–Reverting a continuing trend, deflation affected food products for the first time since January 2017

–While still overall down on year, April’s slower fall indicates retail prices are likely to start rising in the near term

Prices at U.K. retail stores continue to fall but at a slower pace, anticipating a period of return to inflation as the reopening of the economy starts to bring a rebalancing of consumer spend, according to the latest report by Nielsen and the British Retail Consortium.

Shop prices fell 1.3% on year between April 1 and April 9, a slower decline than the 2.4% decrease seen in March, the report said.

Nonfood deflation slowed significantly to 1.7% on year in April compared with a decline of 4.0% in March, marking the slowest rate of price decline since January 2020, the report said.

Reversing a long-lasting trend, food prices also fell, at a 0.6% deflation. This compares with a 0.3% price rise in March and marks the first time that food prices are deflationary since January 2017, Nielsen and the BRC said.

“The decline in food prices was the result of fewer promotions in the comparison period, April 2020, as retailers tried to deter shoppers from stockpiling before and during the first lockdown,” BRC Chief Executive Helen Dickinson said.

However, consumers won’t feast on lower prices for much longer, the report said.

“Falling prices are unlikely to last; in the months ahead, retailers will have to battle the cost pressures from Brexit red tape, rising shipping costs due to international supply issues, as well as increasing global food and oil prices,” Ms. Dickinson said.

Meanwhile, shoppers are faced with the economic fallout of the coronavirus pandemic, further enhancing the risk for the consuming bubble to pop, the report warned.

“Looking ahead, with many households uncertain about their personal finances, if external cost pressures start to feed through then shoppers may become more price sensitive over the next few months, as lifestyles are adapted to a new normal,” Nielsen analyst Mike Watkins said.

–Deflation at U.K. retail stores slowed to 1.3% on year in April from 2.4% in March

–Reverting a continuing trend, deflation affected food products for the first time since January 2017

–While still overall down on year, April’s slower fall indicates retail prices are likely to start rising in the near term

Prices at U.K. retail stores continue to fall but at a slower pace, anticipating a period of return to inflation as the reopening of the economy starts to bring a rebalancing of consumer spend, according to the latest report by Nielsen and the British Retail Consortium.

Shop prices fell 1.3% on year between April 1 and April 9, a slower decline than the 2.4% decrease seen in March, the report said.

Nonfood deflation slowed significantly to 1.7% on year in April compared with a decline of 4.0% in March, marking the slowest rate of price decline since January 2020, the report said.

Reversing a long-lasting trend, food prices also fell, at a 0.6% deflation. This compares with a 0.3% price rise in March and marks the first time that food prices are deflationary since January 2017, Nielsen and the BRC said.

“The decline in food prices was the result of fewer promotions in the comparison period, April 2020, as retailers tried to deter shoppers from stockpiling before and during the first lockdown,” BRC Chief Executive Helen Dickinson said.

However, consumers won’t feast on lower prices for much longer, the report said.

“Falling prices are unlikely to last; in the months ahead, retailers will have to battle the cost pressures from Brexit red tape, rising shipping costs due to international supply issues, as well as increasing global food and oil prices,” Ms. Dickinson said.

Meanwhile, shoppers are faced with the economic fallout of the coronavirus pandemic, further enhancing the risk for the consuming bubble to pop, the report warned.

“Looking ahead, with many households uncertain about their personal finances, if external cost pressures start to feed through then shoppers may become more price sensitive over the next few months, as lifestyles are adapted to a new normal,” Nielsen analyst Mike Watkins said.