// Shop prices dropped in September as retailers cut prices to encourage spending
// Shop prices fell 1.6% in September compared to August
Shop prices have continued to drop in September as retailers cut prices in order to encourage further spending, but a no-deal Brexit may come at a cost.
Shop prices fell 1.6 per cent in September compared to August, according to the latest BRC Nielsen Shop Price Index.
This is below the 12 month average price decrease of 1.1 per cent, but above the six month average price decrease of 1.7 per cent, respectively.
Non-food prices dropped 3.2 per cent in September compared to a decline of 3.4 per cent in August. This is below the 12 month average price decline of 2.6 per cent, but above the six month average price decline of 3.5 per cent.
Food inflation eased to 1.2 per cent in September, down from 1.3 per cent in August. This is below the 12 and six month average price increases of 1.4 per cent and 1.4 per cent, respectively.
Fresh Food inflation held at 0.2 per cent in September. This is below the 12 and six month average price increases of 0.6 per cent and 0.5 per cent, respectively – the lowest rate of increase since February 2017.
“Consumers can celebrate yet another month of falling shop prices, particularly in the non-food ranges such as clothing and footwear,” BRC chief executive Helen Dickinson said.
“Retailers are cutting prices in order to encourage further spending where sales are yet to pick up.”
However, she warned that a looming no-deal Brexit may come at a cost to the industry.
“Many non-food retailers will face large tariff bills, and as a result, the total cost to the industry and its customers would be much higher.
“The government must prioritise a tariff-free deal, otherwise hard-pressed consumers will bear the brunt of price increases.”
Nielsen head of retail and business insight, Mike Watkins said: “The recessionary impact of the pandemic on retailing will become more visible during the golden quarter and retailers are already adapting their business models.
“Non-food retailers had the additional challenge of selling through seasonal stock, disrupted by unpredictable weather.
“Looking ahead we can expect shop price inflation to remain at current low levels for the next quarter.”