Shop prices fall in August as retailers tempt shoppers with Sales

Shop prices dropped by 1.6% in August, compared with a 1.3% decline in July, as retailers used discounting to try to tempt shoppers to spend.

This was below both the 12- and-six-month average price decreases of 1% and 1.5% respectively, according to the latest figures from the BRC and Nielsen.

Non-food prices fell by 0.5% from a 2.9% decline in July to a 3.4% drop in August as shoppers limit their spend on discretionary items.

This was below the 12-month average decline of 2.4% and the six -month average decline of 3.3%, as retailers across all sectors turned to more discounting to bring in sales.

Food inflation also eased down 0.2% to 1.3%, largely driven by the slowing of fresh food inflation to just 0.2% in August.

Dickinson said: “Consumers will welcome another month of falling prices in shops. The faster rate of decline was driven by cheaper non-food goods, as many retailers have continued to run promotions and Sales in order to entice customers to spend and make up for lost ground during lockdown. Meanwhile, the availability of fresh seasonal produce has allowed food inflation to ease.

“However, these lower prices are already under threat from increased costs associated with implementing coronavirus safety measures and are certain to rise if the UK ends the transition period without a trade deal with the EU.”

Nielsen head of retailer and business insight Mike Watkins added: “With millions of families choosing to holiday in the UK this summer, supermarket sales remain buoyant with sales of fresh foods showing an uptick, helped by hot weather earlier in the month and slowing inflation as seasonal produce becomes available.

“This has offset some of the increases in ambient food and drink. However, deflation continues in much of non-food with retailers still unsure about the levels of demand for next season’s ranges.”