Data from the British Retail Consortium (BRC) shows overall shop prices fell at their fastest rate in over a year during August, although the trade body warned that a no-deal Brexit could reverse this trend.
The BRC-Nielsen Shop Price Index indicates that prices fell by 0.4% year-on-year, compared with 0.1% fall in July.
Non-Food prices slipped 1.5% in August compared to July’s decrease of 1.2%.
Meanwhile, food inflation eased slightly to 1.6% in August from 1.7% the previous month, due to higher levels of discounting within supermarket sector. The cost of fresh food accelerated in August to 1.4% from 1.2% in July, while ambient food inflation slowed to 1.8% from 2.4%.
Helen Dickinson, Chief Executive of the BRC commented: “Weak consumer spending and stiff competition has kept prices down in the UK, however a disruptive no-deal Brexit, which would raise the cost of imported goods, could reverse this trend. In the interests of both consumers and retailers, the Government must redouble its efforts to find a workable agreement with the EU that would avoid a no deal scenario.”
Mike Watkins, Head of Retailer and Business Insight at Nielsen added: “August is often a difficult month for retailers made more challenging this year by unseasonable weather early in the month, and we have seen the return of vouchering by many supermarkets and some non-food retailers bringing forward end of season discounts to help drive sales.
“Consumers remain uncertain about when and where to spend but the good news is that any inflationary cost pressures that may be building in the food supply chain, have not yet reached shop prices.”
