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Shop prices hit by fastest decline in over a year

Shop prices fell by 0.4% in August, marking the fastest rate of decline since June 2018. 

August’s deflation was below the 12- and six-month average price increases of 0.3%, the BRC-Nielsen Shop Price Index has shown. 

Non-food prices fell by 1.5% – again the sharpest decline since June 2018. 

Helen Dickinson, chief executive of the British Retail Consortium (BRC), said: ”Consumers were the real winners this month as prices fell at their fastest rate in over a year. Prices of non-food goods fell at a faster rate than both the previous month and the 12-month average, while food inflation eased slightly due to higher levels of discounting from supermarkets.

“Weak consumer spending and stiff competition has kept prices down in the UK. However, a disruptive no-deal Brexit, which would raise the cost of imported goods, could reverse this trend. In the interests of both consumers and retailers, the government must redouble its efforts to find a workable agreement with the EU that would avoid a no-deal scenario.”

Mike Watkins, head of retailer and business insight at Nielsen, added: “August is often a difficult month for retailers, made more challenging this year by unseasonable weather early in the month, and we have seen some non-food retailers bringing forward end-of-season discounts to help drive sales.

“Consumers remain uncertain about when and where to spend but the good news is that any inflationary cost pressures that may be building in the food supply chain, have not yet reached shop prices.”  

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