Shop price deflation accelerates in September and is set to continue

The British Retail Consortium (BRC) Nielsen Shop Price Index revealed it is the seventeenth consecutive month of deflation.

In September food inflation remained at 0.3%, the lowest ever recorded.

Fresh food inflation was flat in the month, the first time since February 2010 that the category hasn’t experienced inflation.

BRC director general Helen Dickinson said: “In September, over a third of all groceries going through the tills were on some sort of promotion or special offer, meaning savvy shoppers are picking the deals that work best for them – allowing them to effectively budget.”

Non-food deflation accelerated to 3.2% in September from 2.9% in August.

Deflation slowed across the DIY, gardening and hardware categories, while deflation accelerated across books, stationery and home entertainment, furniture and flooring, and electricals. Deflation across fashion remained at 10.2%.

The only categories to record inflation within non-food were health and beauty, up 2% on last month and ‘other non-food’, up 0.6%.

Prices set to stay low

Nielsen head of retailer and business insight Mike Watkins said: ‘’There are historic low levels of price increases across the high street, and with more price cuts expected from supermarkets over the next few weeks shoppers will continue get great savings.

“Whilst sales patterns are still difficult to predict not least following the unusually warm late summer, we can anticipate a continuation of the current low levels inflation and even deflation for the rest of the year. This will help shoppers to plan their spending in the run up to the start of Christmas trading.’’

Dickinson added: “Consumers can take heart that the outlook for inflation remains modest. Falling commodity prices, the strengthening of sterling, benign pressure in the supply chain and, critically, fierce competition across the retail industry suggests lower shop prices for consumers will continue.”