Low commodity prices and strong competition amongst retailers dragged prices in British shops down for the 30th consecutive month in the run-up to the Christmas trading period, according to a sector survey.
In September, shop prices in the UK fell by 1.9 per cent year-on-year, according to the British Retail Consortium (BRC), after having fallen by 1.4 per cent in the month before.
Clothing, books and DIY items were among the goods that experienced the deepest levels of deflation, reflecting low commodity prices and competition between retailers
“It was a particularly good month to hunt for bargains in clothing and footwear with prices falling by 6% in this category,” said Helen Dickinson, BRC Chief executive.
Despite the ongoing supermarket price war, the figures showed food price deflation at just 0.4 per cent, slowing slightly from 0.5 per cent a month earlier. Non-food prices were also lower from 2.9 per cent to 2.8 per cent.
Although consumer confidence slowed, industry retailers will continue to offer great value to customers as they pass on savings, the BRC said.
“Retailers will be planning diligently in the run up to the busy Black Friday and Christmas shopping periods with consumers likely to enjoy even greater bargains,” said Helen Dickinson, BRC Chief executive.
Mike Watkins Head of Retailer and Business Insight at Nielsen said that clothing and toy retailers would need to keep prices low to draw customers over Christmas.
“Supermarkets will be working hard to get sales growing again, as intense price competition is having a deflationary impact on the overall shopping basket,” Mr Watkins said in a statement.
The Bank of England has said it expects inflation to pick up in 2016. It is expected to say on Thursday that it has kept interest rates on hold for an 80th consecutive month.
