Average prices in British shops in August were 0.8% lower than a year before, a smaller decline than in previous months and one which reflected rising costs for stores, the British Retail Consortium has said.
The BRC's measure of shop price inflation - unlike most other inflation measures - is typically negative. July's reading showed a fall of 1.2% and the average annual decline over the past 12 months was 1.5%.
"There are some modest indications that rising costs are starting to filter through into product prices," BRC chief executive Helen Dickinson said.
Price rises were most noticeable for electrical goods due to global shipping delays and a shortage of microchips, she said.
In July, British retailers cut their prices more heavily compared with June as supermarkets intensified their battle for customers, offering some relief to shoppers as broader inflation accelerates.
Food Price Inflation
Food prices were also likely to rise over the coming months due to rising commodity prices, increased transport costs reflecting a shortage of truck drivers, and greater post-Brexit costs for importing food from the European Union, she added.
"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," she said.
Dickinson also added that 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.
Good News For Shoppers
Mike Watkins, Head of Retailer and Business Insight, NielsenIQ, said, "The good news for shoppers is that shop price inflation remains below consumer price inflation and any moderate increases in prices are being driven by wider economic conditions and seasonal supply changes.
"With shoppers now returning from their summer holidays many will be reviewing their household budgets. So the next few months will be an important time for retailers to keep prices stable by absorbing as much of any increase in their supply chain costs as possible."