Shop prices fall in August

Shop Prices fell by 1.6% in August compared to a decrease of 1.3% in July, according to new data from the British Retail Consortium (BRC).

This is below the 12 and six-month average price decreases of 1.0% and 1.5%, respectively.

Non-food prices also fell by 3.4% during the month, compared with a decline of 2.9% in July. This is below the 12 and six-month average price declines of 2.4% and 3.3%, respectively.

However, food inflation eased to 1.3% in August, down from 1.5% in July, whilst fresh food inflation slowed to 0.2% during the period, down from 0.9% on the previous month. 

Helen Dickinson OBE, chief executive of the BRC, said: “Consumers will welcome another month of falling prices in shops. 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.”

She added: “The absence of a tariff-free deal will lead to higher prices for consumers as thin retail margins force retailers to raise prices in response to higher import costs. Furthermore, without a deal that reduces checks and red-tape, the UK supply chain faces severe disruption, reducing the availability of goods and further raising prices for consumers.

“It is essential that the Government ensures the British public are front of mind in their negotiations, otherwise it will be consumers, retailers and the UK economy that will suffer.”