UK shop prices witnessed deflation of 0.6% last month, marking a decrease from the 0.3% deflation observed in August, according to the British Retail Consortium (BRC) and NielsenIQ.
This figure represents the lowest shop price annual growth since August 2021.
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During the month, non-food items continued to experience deflation, recording a -2.1% decrease in September, a further drop from the -1.5% seen in the previous month.
Food inflation, on the other hand, saw an increase to 2.3% in September 2024 from 2.0% in August, surpassing the three-month average rate of 2.2%.
The annual rate of inflation in this category remains at its lowest since November 2021.
Inflation in fresh food prices also picked up, reaching 1.5% in September from 1.0% in August, aligning with the inflation rate of June 2024.
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By GlobalDataThe three-month average for this category stands at 1.3%.
Ambient food inflation slowed to 3.3% in September, a slight decrease from 3.4% in August.
This rate is below the three-month average of 3.4% and has remained at its lowest point since March 2022.
BRC chief executive Helen Dickinson said: “September was a good month for bargain hunters as big discounts and fierce competition pushed shop prices further into deflation.
“Shop price inflation is now at its lowest level in over three years, with monthly prices dropping in seven of the last nine months. This was driven by non-food, with furniture and clothing showing the biggest drops in inflation as retailers tried to entice shoppers back.
“Easing price inflation will certainly be welcomed by consumers, but ongoing geopolitical tensions, climate change, and government-imposed regulatory costs could all reverse this trend.”
Last month, BRC released new research indicating that the UK retail industry is disproportionately taxed compared to other sectors.
Dickinson added: “Retail faces a disproportionate tax burden compared to other industries and the government must take decisive action in the upcoming Budget and introduce a 20% Retail Rates Corrector – a 20% adjustment to bills for all retail properties – to level the playing field. This will allow retailers to continue to offer the best possible prices to their customers while opening shops, protecting jobs and unlocking investment.”
