Shop prices have dropped for the 15th month running as retailers cut prices in an effort to encourage Brits to shop.
Prices fell by 1.6 per cent during August compared to a 1.3 per cent fall in July, according to the latest BRC and Nielsen figures.
This was below the 12- and six-month average price decreases of one per cent and 1.5 per cent respectively.
Meanwhile, non-food prices fell by 3.4 per cent in August compared to a 2.9 per cent decline the previous month.
Food inflation also eased down 0.2 per cent to 1.3 per cent due to the slowing of fresh food inflation to just 0.2 per cent in August.
BRC chief executive Helen Dickinson warned that Brexit uncertainty could lead to a hike in prices.
“Consumers will welcome another month of falling prices in shops,” Dickinson said.
“The faster rate of decline was driven by cheaper non-food goods, as many retailers have continued to run promotions and sales in order to entice customers to spend and make up for lost ground during lockdown.
“Meanwhile, the availability of fresh seasonal produce has allowed food inflation to ease.
“However, these lower prices are already under threat from increased costs associated with implementing coronavirus safety measures and are certain to rise if the UK ends the transition period without a trade deal with the EU.”
Nielsen retail and business insight director Mike Watkins said: “With millions of families choosing to holiday in the UK this summer, supermarket sales remain buoyant with sales of fresh foods showing an uptick, helped by hot weather earlier in the month and slowing inflation as seasonal produce becomes available.
“This has offset some of the increases in ambient food and drink. However, deflation continues in much of non-food with retailers still unsure about the levels of demand for next season’s ranges.”
Source: Retail Gazette