UK shop prices fell at the quickest rate in over three years this September, as per the British Retail Consortium (BRC).
- Overall shop price deflation hit 0.6% in September, the fastest drop since August 2021, with non-food items showing significant deflation.
- Non-food deflation rose to 2.1%, as discounts on clothing and furniture increased due to low demand from unseasonal weather and tight household budgets.
- Fresh food inflation rose to 1.5% affected by adverse weather impacting British produce and import delays.
- Retailers continue to strategise with promotions to stimulate consumer demand amid easing price inflation.
In September, the British Retail Consortium (BRC) reported that UK shop prices fell at their fastest rate in over three years. This drop in prices is a result of retailers implementing widespread discounts as they aim to attract more customers. The deflation rate for shop prices was registered at 0.6% for September, marking the quickest decline since August 2021, an increase from 0.3% in the previous month.
The deflation in non-food items was particularly notable, increasing to 2.1% from 1.5% in August. Retailers targeted reductions in clothing and furniture prices amid low consumer demand that has been influenced by unseasonal weather patterns and financial pressures on households.
On the other hand, fresh food prices experienced inflation rising to 1.5%, up from 1% in August. The increase is attributed to adverse weather in the UK affecting the production of salads and soft fruits, as well as to storms in the Atlantic which delayed the importation of exotic fruits. Additionally, olive oil prices, classified under fresh produce, have also seen substantial hikes, contributing to the increased inflation.
Mike Watkins, NielsenIQ’s head of retail and business insight, noted the deflation in non-food prices as a positive for consumers planning their household budgets. He observed the minor increase in food inflation as indicative of shop price inflation stabilising toward a long-term average. However, he suggested that retailers need to maintain focus on driving demand with appealing promotions in the coming weeks.
Helen Dickinson, Chief Executive of the BRC, pointed out that September was particularly advantageous for consumers seeking bargains due to aggressive discounting strategies and competitive retail dynamics. Shop price inflation has decreased to its lowest level in over three years, declining in the majority of the past nine months. Dickinson also cautioned that ongoing geopolitical issues, climate change impacts, and regulatory costs pose risks to the continuation of this trend.
Consumers are currently benefiting from lower shop prices and robust discounting, yet external factors may challenge these conditions moving forward.
