Shop price inflation has fallen for the fifth month in a row and is now at its lowest level since August last year.
The BRC-Nielsen Shop Price Index for October showed that shop price annual inflation decelerated further to 5.2%, down from 6.2% in September, which is below the three-month average of 6.1%.
Meanwhile, non-food price inflation fell by 3.4% in October, down from 4.4% in September and was well below the 4.2% three-month average. Food inflation slowed down even more in October at 8.8%, down from 9.9% in September.
Commenting on this encouraging set of figures, British Retail Consortium chief executive Helen Dickinson said: “Shop price inflation eased for the fifth consecutive month to its lowest rate since August 2022. Imported goods saw higher levels of inflation due to a weaker pound, still-high producer costs and emerging trade frictions, while prices for some domestically produced foods, such as fruit, were lower compared to last month.”
Acknowledging the role retailers played in lowering prices, Dickinson added: “Retailers have been battling to keep prices down for their customers in the face of rising transport costs, high interest rates and other input costs. To keep inflation heading in the right direction, it is vital that the Government does not burden businesses with unnecessary new costs. Without immediate action from the Chancellor, retailers have an additional £470 million per year on their business rates bill, jeopardising the progress made. Ultimately, it’s consumers who would pay the price for the rising rates bill.”
Brtitish Independent Retailers Association chief executive Andrew Goodacre also praised retailers for their contribution to keeping prices low. He said: “These inflation figures are encouraging and they show that retailers are doing their bit in keeping prices low. They also show a lack of demand on the high street with retailers already discounting heavily in this ‘golden quarter’. I hope that the figures encourage the Bank of England to hold interest rates again. This should increase consumer confidence and encourage expenditure on the high streets without any risk of inflation increasing as a result.”
At NielsenIQ, head of retailer and business insight Mike Watkins added:
“Inflation has helped the top-line sales growth of many food retailers this year but in reality, shoppers have been paying more and buying less. And the rest of the retail trade has seen less benefit due to the continued squeeze on discretionary spend. This time last year pressure was growing on household incomes as inflation was accelerating in fuel, energy, and food so as inflation continues to decelerate, we now need an uptick in sentiment to help retail sales over the next eight weeks.”
