Falling shop price inflation provides fillip to consumers

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The Independent Online

UK shop price inflation has fallen for the second consecutive month, providing customers with a major boost ahead of Christmas.

The British Retail Consortium said that shop price inflation fell by 0.1 per cent in the year to September, driven largely by deflation in non-food items.

Stephen Robertson, director general of the BRC, said: "More good news for customers. Prices for non-food goods have been deflationary for ten consecutive months now with clothing, electricals and furniture showing the biggest falls as retailers discount to generate sales."

Falling inflation makes customers feel better off as it leads to lower prices in shops. However, it is not always welcomed by retailers, who have to sell more products to maintain sales.

The BRC revealed that overall shop price inflation actually rose by 0.1 per cent in September from August. According to the industry body, food prices also rose by 2.5 per cent in the year to September, up from 2.3 per cent in August. The BRC attributed the rise to an uplift in tinned and packet food inflation, which accelerated from 4.9 per cent from 3.8 per cent in August.

Mr Robertson said: "Fresh food inflation fell to its lowest level since the index began in 2005 – a dramatic contrast with a year ago. Shop prices for some manufactured foods increased more quickly than last month as big increases in the world prices of sugar and cocoa pushed up costs, but this was not enough to affect overall shop price inflation."

In non-food sectors, clothing and footwear retailers suffered a 5.7 per cent fall in prices in September, while electricals retailers were down by 4.4 per cent. Total non-food prices fell by 1.4 per cent last month.

However, health and beauty retailer's prices actually rose by 3.3 per cent, and DIY, gardening and hardware retailers managed to pass on a 2 per cent rise in prices to customers.