// Shop prices fell in February compared to January
// They reached the lowest rate of deflation since May 2020
New research has found that shop prices continued to fall throughout February, reaching the lowest rate of deflation since May 2020.
The numbers fell by 2.4 per cent in February, lower than January’s decrease of 2.2 per cent as lockdown continued to impact consumer demand.
This was below the 12 and six-month average price decreases of 1.7 per cent and 1.8 per cent respectively, according to the BRC-Nielsen Shop Price Index.
Meanwhile, non-food prices fell by 3.9 per cent in February compared with a 3.6 per cent decline in January.
Food inflation was steady at 0.2 per cent, which was the lowest inflation rate since February 2017.
Fresh food prices fell for the third consecutive month with prices dropping by 0.8 per cent, the same rate as in January, while ambient food price inflation fell to 1.6 per cent in February, down from 1.7 per cent the previous month.
“Prices in February fell, driven by a drop in non-food prices,” BRC chief executive Helen Dickinson said.
“With the third lockdown constricting consumer spending across all income brackets, many retailers have been vigorously discounting products in an attempt to encourage additional spending.
“Meanwhile, despite Brexit-related costs, food inflation remained steady thanks to fierce competition between grocers to maintain their market share amid declining incomes for some UK households.”
Nielsen head of retailer and business insight Mike Watkins added: “With the national lockdown continuing, prices across fashion and clothing retailers continue to fall ahead of the anticipated reopening of stores in April.
“However, for grocery retailers, despite basket spends growing by over 25 per cent and volume sales up four per cent since the start of the year, more shoppers are looking to stretch their budget and price-led competition is keeping a lid on increases in food prices.”