Data: Fall in shop prices slows as supply chain disruption begins to bite

The rate of shop price deflation eased to 0.8% year-on-year in August compared to July’s decrease of 1.2%, according to the latest the BRC-Nielsen Shop Price Index.

Non-Food deflation slowed to 1.2% in August, compared to a fall of 1.8% in July. This is a slower rate of decline than the 12- and 6-month average price declines of 2.6% and 1.8%, respectively.

Food deflation slowed 1.2% for the period compared to July, while food prices fell for the ninth consecutive month of the year. 

Collated data since July 2020 shows that non-food prices have stayed deflationary for the last 12 months, while food prices have been more volatile. 

However, the chief executive of the British Retail Consortium, Helen Dickinson, warned that inflation of shop prices could be around the corner for customers. 

“While it is good news that overall retail prices fell year on year, there was a slight rise in prices in the previous month. There are some modest indications that rising costs are starting to filter through into product prices. Some of the Non-Food categories, such as electricals, saw sharp rises in inflation compared to last year, owing to global issues from delayed shipping and shortages of microchips. Food retailers are fighting to keep their prices down as far as possible. But mounting pressures – from rising commodity and shipping costs as well as Brexit-related red tape, mean this will not be sustainable for much longer, and food price rises are likely in the coming months.

“Low prices are already under threat, and now the HGV driver shortage has created an additional problem with a shortfall of 90,000 drivers. Disruption has been limited so far, but in the run-up to Christmas the situation could get worse, and customers may see reduced choice and increased prices for their favourite products and presents. The government must act swiftly and rapidly increase the number of HGV driving tests taking place, provide temporary visas for EU drivers, and make changes on how HGV driver training can be funded. Without government action, it will be the British consumers who will pay the price.”