Shop prices fall in August
Shop prices fell for the 28th consecutive month in August, dropping by 1.4% year-on-year which was unchanged from July.
The figures released by the British Retail Consortium and Nielsen in their monthly shop price index reveal that the food category reported annual inflation of 0.2%, up marginally from the 0.1% rise in July.
Meanwhile, non-food deflation accelerated further to 2.4% from 2.3% in July.
BRC director general, Helen Dickinson, said: “Shop prices fell by 1.4% this month as a result of intense competition and falling commodity prices, which is good news for consumers who have seen 28 consecutive months of prices drops.
“Annual food prices rose for a second month but once again the rise was marginal, by just 0.2% year-on-year, and is likely to be a temporary fluctuation in a longer term downward trend driven by ongoing competition.
“A relatively benign economic environment and a fiercely competitive market will see retailers continue to respond to their customers with prices and promotions to maintain market share.”
The BRC said August marked the 29th month of falling non-food prices as clothing retailers discounted heavily in an attempt to shift stock with prices falling on average by 5.4%. Furniture and flooring saw a sharp deceleration in deflation to 1.2% while prices in the books, stationery and home entertainment category fell on average by 5.2%.
Mike Watkins, head of retailer and business insight at Nielsen, said: “Consumer confidence continues to increase but many shoppers are still unable or unwilling to spend freely, so retailers are continuing to offer high levels of promotions and price cuts. The underlying trend is for price deflation across both food and non-food retail and with shoppers now back from summer holidays we can expect some good deals and attractive pricing for shoppers over the next few weeks.“
