Shop prices fell by a rate of 0.1% in July, marking the second consecutive month of deflation since October 2018.
July’s deflation was below the 12 and six-month average price increases of 0.3% and 0.4% respectively, the BRC-Nielsen Shop Price Index (SPI) has shown.
Non-food prices fell by 1.2%, the same rate of decrease as June, as retailers continue to rely on price discounts to attract consumers.
British Retail Consortium, chief executive, Helen Dickinson said: “Shop prices fell by 0.1% for the second month in a row. Many consumers will be pleased to see the price of non-food products continuing to fall at a steady rate, underlining the stiff competition between retailers that is driving down prices. Furthermore, food price inflation eased slightly, in part due to the fall in global food prices.
“While we expect food inflation to remain steady over the next few months as retailers work hard to keep prices low, this will depend on whether the UK can navigate an agreement with the EU to ensure frictionless tariff-free trade continues after 31 October.”
Head of retailer and business insight at Nielsen, Mike Watkins added: “With so much economic uncertainty, it’s good news for shoppers that there was no pressure coming from shop price inflation during July. Looking ahead for the next few months, we anticipate broadly stable food inflation and non-food retailers looking to keep any price increase to a minimum, as shoppers continue to be cautious around their retail spend.”