Shop prices in the UK have dropped significantly this September, the lowest in over three years, according to the British Retail Consortium (BRC).
- Overall shop price deflation reached 0.6% in September, marking a notable increase from the previous month’s 0.3%.
- Non-food items experienced the steepest deflation at 2.1%, spurred by discounts on clothing and furniture amid low demand.
- Despite the overall deflation trend, fresh food inflation rose due to adverse weather affecting local and import production.
- Experts suggest retailers continue to offer promotions to attract consumers amidst economic pressures.
Shop prices across the United Kingdom saw their most significant decline in three years this September, as revealed by the British Retail Consortium (BRC). Retailers implementing price cuts in a bid to attract customers contributed to this trend. The overall shop price deflation was measured at 0.6%, an increase from August’s 0.3% rate, and the fastest drop since August 2021.
The non-food sector recorded a deflation rate of 2.1%, which accelerated from the previous month’s 1.5%. This was largely driven by discounts on clothing and furniture, reflecting a decrease in demand caused by unseasonal weather conditions and tighter household budgets. Such decisive reductions in prices highlight the competitive efforts of retailers to draw consumers back to stores.
However, contrasts were evident in fresh food prices, which showed a rise in inflation. This increase reached 1.5% from 1% in August. The escalation was attributed to wet weather impacting British salad and soft fruit production. Furthermore, storms in the Atlantic delayed imports of exotic fruits, pushing prices higher. A noticeable surge in olive oil prices, considered a fresh produce in the BRC’s evaluation, also contributed to this inflation.
Industry insights from Mike Watkins, NielsenIQ’s head of retail and business insight, indicated that non-food price deflation aids consumers in their household budget planning. His view is that the slight increase in food inflation points towards broader price stabilisation near long-term norms. Retailers remain urged to sustain demand via enticing promotions as the year progresses.
BRC’s chief executive, Helen Dickinson, highlighted September as a favourable month for bargain hunters due to substantial discounts and intense market competition, further pushing shop prices into deflation. Despite the easing of price inflation being beneficial to consumers, challenges such as geopolitical tensions, climate change, and regulatory costs could potentially hinder this downward trend.
The recent price deflation offers relief to consumers, though future inflation trends remain uncertain due to external pressures.
