Shop prices in the UK declined by 0.6% in September, the steepest since May 2018, according to the latest data from BRC-Nielsen Shop Price Index.
Prices of non-food items fell by 1.7% in September compared to 1.5% in August.
Head of retailer and business insight at Nielsen, Mike Watkins, said, "With consumers feeling uncertain about spending, retailers continue to focus on limiting price increases coming through the supply chain.
'A Challenging Summer'
"Prices have fallen in nonfood [products] helped by seasonal reductions and many food retailers have introduced price cuts to help regain momentum after a challenging summer."
Food inflation eased to 1.1% in September from 1.6% in August, the lowest since April 2018.
Fresh food inflation rate halved in September to 0.7% from 1.4% in August, reflecting lower domestic prices for vegetables and lower global prices for meat.
'Falling Consumer Demand'
Chief executive of the British Retail Consortium, Helen Dickinson OBE, said, "While consumers may welcome lower prices, falling consumer demand is squeezing retailers’ already tight margins. With business costs continuing to rise – including business rates, wage bills, and pension costs – the high street risks more big name closures."
Ambient food inflation saw a marginal decline to 1.7% in September from 1.8% in August.
Dickinson also pointed out that reforming business rates is the most effective way in which the Government can support the retail industry.
Commenting on the trend for the coming months, Watkins, said, "Competition for discretionary spend will intensify across all channels as we head towards the end of the year and we anticipate more promotional savings for shoppers and inspiring media campaigns that help to drive incremental sales."
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Dayeeta Das. Click subscribe to sign up to ESM: European Supermarket Magazine.