Shop prices fell by 1.6 per cent in September, a steady rate of decline as in August, but below the 12- month average price decrease of 1.1 per cent.

The latest British Retail Consortium (BRC) and Nielsen report showed that non-food prices fell by 3.2 per cent in September, compared to a decline of 3.4 per cent in August.

Food inflation eased to 1.2 per cent in September, down from 1.3 per cent in August, while fresh food inflation held at 0.2 per cent in September – the lowest rate of increase since February 2017. Ambient food inflation slowed to 2.5 per cent in September, down from 2.8 per cent the previous month.

BRC chief executive Helen Dickinson said that consumers can celebrate yet another month of falling shop prices, particularly in areas like clothing and footwear.

“Retailers strive to provide the best value, quality goods, but their ability to do so, come 2021, is under threat,” she warned. “Without a zero-tariff deal with the EU, supermarkets will be subjected to £3.1 billion a year of tariffs on food and drink, which they will have little choice but to pass on to their customers as retail margins are so thin.

“Many non-food retailers will also face large tariff bills, and as a result, the total cost to the industry and its customers would be much higher – the government must prioritise a tariff-free deal, otherwise hard-pressed consumers will bear the brunt of price increases.”

Mike Watkins, head of retailer and business insight at Nielsen, noted that the recessionary impact of the pandemic on retailing will become more visible during the golden quarter and retailers are already adapting their business models.

“Food shop price inflation has slowed with supermarkets introducing new price cuts this month and non-food retailers had the additional challenge of selling through seasonal stock, disrupted by unpredictable weather,” he added. “Looking ahead we can expect shop price inflation to remain at current low levels for the next quarter.”

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