Industry figures released today show that food prices fell back into deflation in September, as grocers prepare for battle in the weeks leading up to Christmas.
Nielsen and the British Retail Consortium (BRC)’s latest monthly index said food revealed annual deflation for the first time in three months, falling to 0.5% after a 0.2% rise in August.
This was led by a 1.5% decline in fresh food prices, compared with a 0.5% fall in August, with products including meat and fish seeing the biggest declines.
Nielsen’s Head of Retailer and Business Insight Mike Watkins said: “It’s good news for shoppers that shop prices are again lower than a year ago in supermarkets and this will help stimulate spending in the important last quarter of the year.
This will allow shoppers to plan with more confidence when juggling the household budget. Within food retailing, there is still downward pressure on prices and this is expected to continue as supermarkets battle for the wallets of the Christmas shopper, whilst on the high street, many non-food retailers are using strong, seasonal promotions to drive sales growth.”
Non-food prices also fell faster than the previous month, reporting a drop of 2.9% from 2.4% in August, off the back of heavy discounting on electricals and home entertainment.
“While consumer confidence slowed slightly the fortuitous mix of near flat inflation and falling prices in both food and non-food will help to maintain retailers’ confidence for the foreseeable future,” said BRC Director General Helen Dickinson.