UK retail prices were broadly flat in May as food price rises accelerated but non-food prices were cut, according to fresh data from the industry.
The monthly shop price index from the British Retail Consortium and NIQ was down 0.1% this month compared to a year ago, unchanged from its position in April.
Non-food deflation deepened to 1.5% in May from 1.4%, as prices fell faster for electricals, which the BRC said was due to retailers trying to encourage spending before any potential knock-on impact from US tariffs. Fashion and furniture retailers unwound previously heavy promotional activity, meanwhile.
Food inflation increased to 2.8% year on year in May, against growth of 2.6% in April, with beef steaks one of the notable increases as wholesale beef prices increased.
Fresh food inflation increased to 2.4% against growth of 1.8% in April, while ambient food inflation eased to 3.3% from 3.7%.
"Whilst shoppers are seeing savings at the checkout as retailers increase promotional activity, increasing prices is still an extra challenge to consumer spending alongside rising household bills," said Mike Watkins, NielsenIQ's head of retailer and business insight.
"And if consumer confidence remain weak as looks likely, then retailers may have to work harder to encourage shoppers to spend over the summer."
It was the fourth consecutive month of increasing food prices, said Helen Dickinson, chief executive of the BRC, with fresh foods the main driver.
With retailers absorbing an estimated £5 billion of costs from April’s increase in employer National Insurance contributions and minimum wages, Dickinson said it was "no surprise that inflation is rearing its head once again".
She said retailers face further costs on the horizon, with the BRC estimating a £2 billion costs from the new packaging tax, though this is one of many long-mooted attempts to try and get the industry to reduce plastic packaging components.
Implementation of the Employment Rights Bill will also raise costs for retailers and other businesses, Dickinson said, though most workers would defend the government's aim to address the one-sided flexibility in the workplace, including by ending zero-hours contracts and making fire-and-rehire more difficult for employers.