Shop prices fell for the 15th consecutive month in July, as retailers maintained high levels of discounting and promotions to attract summer shoppers.
Clothing and footwear prices were down 11.2% on the year before, according to the British Retail Consortium (BRC) Nielsen Shop Price Index. However, the rate of deceleration has decreased since June, when prices were down 13.7% year-on-year. Kids and menswear prices were slashed at a steeper rate than womenswear and footwear.
Overall shop prices - including food - saw the deepest level of inflation since the index began in December 2006, accelerating to -1.9% from -1.8% in June.
Helen Dickinson, director general of the BRC, said: “Against a backdrop of stable commodity markets, the stronger sterling making imports cheaper and wavering retail spending, current levels of deflation are expected to continue.
“While this is great news for consumers, trading conditions across the industry remain challenging. Structural changes in retail are challenging existing business models, which, in many cases, are squeezing margins while other costs, such as business rates, continue to rise.”
She added that continued support from the government would be “key to maintaining a sustained recovery in the economy”.