Shop prices decline again in October as food inflation reaches record low
Shop prices fell for an eighteenth consecutive month in October as intense competition between retailers kept prices low.
Figures released by the British Retail Consortium and Nielsen in their monthly index show that shop prices dropped 1.9% compared to a year earlier. The decline follows a 1.8% fall in September.
Food inflation fell to 0.1% after three consecutive months at 0.3% which was the lowest recorded rate since the BRC and Nielsen began the index in 2006. For the first time since Feb 2010, fresh food experienced deflation with milk, cheese, eggs, vegetables and convenience food all cheaper than they were a year ago.
Meanwhile, non-food deflation slowed marginally to 3.1% in October from 3.2% in September. The BRC said value was a mainstay across the home category with offers on small appliances and electricals performing particularly well as retailers competed to cater for strong pre-Christmas demand.
Never Miss a Retail Update!BRC director general Helen Dickinson said: “For the eighteenth month in a row, shop prices have reported deflation, matching its lowest rate on record of 1.9% experienced in July 2014.
“With a backdrop of falling commodity prices, cheaper imports and benign inflationary pressure in the supply chain, we expect the great deals to continue in the medium term bar any supply chain shocks.”
Mike Watkins, head of retailer and business insight at Nielsen, added: “Shoppers have benefited from favourable global supply conditions in food and drink over the last six months, and supermarket price cutting has also started to have a beneficial impact on food inflation in recent weeks. As a result, shop price inflation continues to be less than CPI. However, with sales volumes at an historic low point for food retailers there is now a risk of food deflation on the horizon.“
