Shop price inflation at zero after two months of deflation

According to the BRC-Nielsen Shop Price Index, food inflation remained unchanged at 2.5% in October, while non-food deflation was 1.3% in October from 1.4% in September.

BRC director general Stephen Robertson said: “This is a great time to be a customer.

“Overall shop prices are no more than they were a year ago. Food inflation has tumbled by three-quarters since its peak last August and is expected to remain low for the rest of the year.

“The price of non-food goods has been deflationary for eleven months in a row – with the biggest falls in clothing, footwear and electricals.”

He added: “Christmas is lining up to be a punch-up between retailers as they battle it out for market share. Customers can reap the benefits from all the promotions and discounts.”

Nielsen senior manager, retailer services, Mike Watkins said: “The latest data seems to show that shop prices have now stabilised which will help shoppers as they plan their budgets in the run up to Christmas.

“Fresh food inflation now seems to have bottomed out while ambient foods have slowed again to 4.3%. However, we don’t anticipate seeing price deflation in the grocery market like we have seen in the non-food channel. Non-food has remained deflationary for 11 successive months which has largely been the result of the VAT reduction and consistently weak demand.”