While shop prices fell in September, the rate of decline slowed following an increase in pressures from transport and commodity costs and labour shortages.
The rate of shop price deflation was 0.5% in September compared to a decrease of 0.8% in August, according to the latest BRC-Nielsen Shop Price Index.
Non-food deflation also slowed to 1.0% in September, compared to a fall in prices of 1.2% in August. This marked a slower rate of shop price decline than the 12- and 6-month average price declines of 2.4% and 1.2% respectively.
Food prices rose by 0.1% in September, the first time in five months that prices rose. This price increase still remained below the 12-month average price growth rate of 0.2%.
British Retail Consortium chief executive Helen Dickinson warned that price rises are on the horizon: “September saw overall prices fall, but the decline is slowing. There are now clear signs the months-long cost pressures from rising transport costs, labour shortages, Brexit red-tape and commodity costs are starting to filter through to consumer prices. Food prices rose year-on-year for the first time in six months, and some non-food products, such as DIY & gardening, are seeing the highest rate of inflation since summer 2018.”
She added that products, such as furniture and electricals, have recorded annual prices rise for consecutive months as the shipping crisis continues.
Dickinson also said: “It is inevitable that prices will continue to rise, but Government intervention would minimise the impact on consumers. Supply chains have been put to the test recently, with CO2 and HGV shortages. Government needs to find a long-term solution to the HGV driver shortage by expanding the size and scope of the new visa scheme for drivers from abroad so they can fill the gaps while new British drivers are trained. Without this, these additional burdens to what is already a precarious trading environment, will affect the British consumer and the prices they pay for the goods they want and need.”
NielsenIQ head of retailer and business insight Mike Watkins said: “Disruption in the supply chain and increased input costs are now starting to feed through and food prices increased slightly from last month. However low prices on seasonal fresh foods are helping to offset rising prices in ambient food.
“Whilst non-food retailers have so far able to mitigate a lot of the impact, the outlook is for shop price inflation to return over the next few months.”
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