Consumers are now enjoying their fourth year of falling retail prices as “intense” competition for shoppers drives deflation, figures show today.
Shoppers found their purchases 1.8 per cent cheaper last month than at the same time a year earlier, and only marginally different from the 2 per cent decline recorded in August, according to the latest BRC-Nielsen shop price index.
We are now in the fourth year of falling shop pricesHelen Dickinson
Food prices fell by 1.3 per cent in September, the highest year-on-year fall ever recorded for food and only the second time that food prices have fallen by more than 1 per cent since the index began. Non-food deflation showed a slight slowdown to 2.1 per cent from 2.5 per cent the month before.
Despite rising global food prices and the devaluation of the exchange rate, shop prices were still showing little sign of nearing inflationary territory.
British Retail Consortium chief executive Helen Dickinson said: “We are now in the fourth year of falling shop prices, so the record-setting run of shop price deflation continues, which is great news for consumers.
“This is as a direct result of the intense competition and transformational change in the retail industry, with consumers having access to more choices and greater ability to compare prices than ever before.”
Mike Watkins, Nielsen head of retailer and business insight, said: “With a new round price cuts by supermarkets in September and fresh foods also promoted to encourage visits, this has helped maintain deflation in shop prices.
“However, the warm and late summer weather was a challenge for many in the non-food channel so we may well see further price discounts as we move into October.”
David Lonsdale, director of the Scottish Retail Consortium, added: “Falling shop prices are leading to a corresponding increase in the spending power of Scottish households, with retailers keen to capitalise on the opportunity this presents.
“The fact that food price inflation is at a record low will be especially welcome to low income households who typically spend proportionally more of their family budget on groceries.”
The index is administered by Nielsen, which collates and analyses the data on behalf of the BRC. It was launched to give an accurate picture of the inflation rate of 500 commonly bought products.