Shop prices fell 1.8% in October
Shop prices fell by 1.8% in October to mark the 30th consecutive month of shop price deflation.
The figures released by the British Retail Consortium and Nielsen in their monthly shop price index show declines in both food and non-food prices with respective falls of 0.4% and 2.7%.
Categories experiencing the deepest level of deflation included clothing, books and DIY items which was a reflection of low commodity prices and competition between retailers.
Meanwhile, fresh food deflation slowed to 1% and ambient food inflation slowed to 0.4% in the month.
Mike Watkins, head of retailer and business insight at Nielsen, said: “With the all-important Christmas trading season arriving soon, non-food retailers will need to maintain these lower prices to drive footfall and supermarkets will be working hard to get sales growing again, as intense price competition is having a deflationary impact on the overall shopping basket.
“Levels of retail spend are going to be hard to predict over the next few weeks but we can anticipate strong media campaigns and probably more promotional activity, so all round it’s good news for shoppers.“
The BRC said retailers will still be considering the implications of implementing the National Living Wage, the apprenticeship levy and the increasing cost of business rates which will require them to find over £14 billion of efficiency improvements over the next five years.
BRC chief executive Helen Dickinson added: “In a competitive, deflationary environment where jobs and growth in communities up and down the country are vital, the industry’s ability to play its part in investing in the Living Wage is being hindered by the business rates system. The Chancellor needs to reduce the disproportionate burden of business rates on the retail industry and keep going with the structural review because this is the key to delivering the core of the Government’s reform programme.”
