Monday, January 24, 2022

Biggest fall in food prices on record as price wars deepen

New figures released today have shown that retail prices have fallen for the fourth consecutive year amid an intensifying price war.

Results from the BRC-Nielsen Shop Price Index found that average prices last month were 1.8 per cent cheaper than this time last year, compared to the two per cent recorded in August.

The supermarket price wars have had a drastic effect on food prices, with the most significant year-on-year fall since the start of the index at 1.3 per cent.

Despite the weak pound no sectors looked in danger of reaching inflationary territory, with non-food deflation still down by 2.1 per cent from last year. 

Notably, deflation has slowed from 2.5 per cent in August.

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“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,” British Retail Consortium chief executive Helen Dickinson said.

“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.”

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Mike Watkins, Nielsen head of retailer and business insight, added: “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.”

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