Non-food prices fell by 2.2% year-on-year in July, compared to a 2.8% drop in June, according to the British Retail Consortium (BRC) and Nielsen’s shop price index.
Shop prices fell by 1.6% on average, down from 2% in June.
“While we may have become accustomed to prices falling, it’s worth noting that this month’s figures have seen the rate of deflation decelerate,” said Helen Dickinson, chief executive of the BRC.
“It is too early to say if this is the this is the beginning of the end of sustained price deflation or whether pressures in the wider economy could merely mark the end of the beginning.”
Mike Watkins, head of retailer and business insight at Nielsen, added: “With unpredictable weather and a change to consumer sentiment underway, we have seen retailers cut prices or increase promotional activity in the last few weeks to help top line sales growth, so it`s of no surprise that shop price deflation is lower in July than in any other month this year.
“Once again it is clear there is currently no inflationary pressure coming from retail and discounting looks set to be a catalyst to stimulate demand in the coming months.”