New figures published by the British Retail Consortium (BRC) and NielsenIQ show the rate of shop inflation has declined to its lowest pace in nearly three years.
Prices have risen just 0.2% over the last month, down from 0.3% in April.
Annual food price inflation is also easing. It's dropped to 3.2% for the last 12 months from 3.4% in the previous month.
Mike Watkins, head of retailer and business insight at NielsenIQ, said: "After a number of months of falling input prices, we are now seeing food inflation stabilise and retailers continue to pass on price cuts to shoppers.
"Across the industry, while inflationary pressure has eased and there is some improvement in shopper sentiment, the unseasonable weather has dampened retail sales, so lower prices look set to continue and promotional activity is likely to drive demand."
The findings from the BRC and NielsenIQ follow new data from the Office for National Statistics which shows a sharp fall in retail figures.
The quantity of goods and services bought by households fell 2.3% compared to last April, according to the ONS, with forecasters only anticipating a 0.4% drop.
FTSE 100
The UK's flagship share index, the FTSE 100, was down eight-points at 8,309 shortly after opening this morning.
Brent crude oil futures were up 0.07%, trading at $83.16 a barrel.
Companies reporting today
- Intermediate Capital Group - Full Year Results
- Softcat - Q2 Trading Statement