Shop price deflation continued unabated in October, with shelf prices coming in 1.7% lower than in the same month last year – almost unchanged from the 1.8% decline registered in September, according to the British Retail Consortium (BRC).
Non-food deflation remained unchanged at 2.1% for the second consecutive month. This is behind the 3-month average of -2.2%.
Food deflation decelerated marginally to 1.2% in October from 1.3% in September. This is in line with the 3-month average.
BRC chief executive Helen Dickinson commented: “While we know that the devaluation of sterling since the Brexit vote is stoking inflationary pressures, the good news for consumers is that retailers have been successful in managing this to date and there is still no impact visible in shop prices.
“However, it is inevitable that imported inflation will begin to make its mark and we would expect to start to see this effect coming through in the first quarter of 2017.”
Mike Watkins, head of retailer and business insight at Nielsen, added: “Supermarkets are keeping prices low and inflationary pressure in the supply chain is not yet being passed on, as competition for the wallet of the shopper continues to be intense.
“Fresh food is a key battleground for attracting new shoppers and there have been further price cuts in recent months. Across the non-food channel, unseasonably warm weather is having the biggest impact on sales – so retailers are holding prices and making promotions attractive to help encourage visits to their stores.”