Food prices slip back into deflation in September

Fresh food prices dropped by 1.5% in September but were offset by a 0.8% rise in ambient prices, according to the BRC-Nielsen shop price index.

The return to deflation follows on from food prices edging up 0.2% in August.

Overall shop prices reported deflation of 1.9% in September, following a 1.4% decline in August.

BRC director general Helen Dickinson said: “Heavy discounting could be seen in electricals, books, stationery and home entertainment. It was a particularly good month to hunt for bargains in clothing and footwear with prices falling by 6% in this category.”

Non-food prices fell even faster in September than the previous month, dropping from 2.4% in August to 2.9% in September.

Food prices bucked the overall trend though as they rose 0.2% during August

Nielsen 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.”