Shop prices drop as retailers battle it out to keep food inflation low

BRC Nielsen shop prices covid-19
Research found that shop prices dropped by 1.2% in October
// Shop prices drop in October as competition grows fierce among retailers
// Shop prices dropped 1.2% in October, compared with a 1.6% decline in September

Shop prices have continued to drop in October as retailers go head to head in a battle for consumers’ more limited spend.

Research found that shop prices dropped by 1.2 per cent in October, compared with a 1.6 per cent decline in September, as retailers used discounting to drive sales.

This was below the 12-month average price decrease of 1.1 per cent, but above the six-month average price decrease of 1.6 per cent, according to the latest figures from the BRC and Nielsen.


Non-food prices fell by 2.7 per cent in October compared with a decline of 3.2 per cent in September, as restrictions and a rise in unemployment meant consumers limited their spend.

This is in line with the 12-month average price decline of 2.7 per cent, but above the six-month average of 3.4 per cent.

Food inflation remained steady at 1.2 per cent in October, driven by an acceleration in fresh food inflation of 0.4 per cent for the month, combined with an easing of ambient food inflation of 2.3 per cent.

“Once again, it is good news for consumers with shop prices falling in October, albeit at a slower pace compared to the previous month,” BRC chief executive Helen Dickinson said.

“As the retail industry began to see sales bounce back, non-food prices saw the shallowest decline since the start of the pandemic.

“However, given the wider economic context, with stricter restrictions and a possible rise in unemployment, we are likely to see continuing discounts in non-food for months to come.

“Meanwhile, food inflation remained low as supermarkets fiercely competed with one another to offer the best quality goods at the lowest prices.”

Nielsen head of retailer and business insight Mike Watkins added: “With pandemic restrictions extended, shopping behaviour has been in a holding pattern as households adjust to new ways of working, living and spending.

“To help sales volumes, non-food retailers are limiting any price increases coming through the supply chain and food retailers are continuing with the lower prices introduced in recent weeks.

“And should the recession and the growth in unemployment have a further impact on consumer spend, we can expect shop price inflation to remain low for the rest of the year.”

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