According to the British Retail Consortium (BRC) overall shop prices have fallen for the fifth consecutive month.

This though may not seem evident to the everyday shopper as they go to the supermarket for their weekly shop because food inflation is increasing – and that's what we generally buy the most often.

Overall shop prices fell by 0.2 percent in September according to BRC data, slightly less than August's 0.5 percent fall.

But when looking at food prices the picture is very different. Food inflation in September was 2.9 percent, a 0.4 percent rise on August's 2.5 percent.

Non food items dropped in price by 2 percent in September compared to a 2.3 percent fall in August.

On an annual basis the BRC Shop Price Index shows a small overall price deflation on 0.2% which, says the BRC, '…remains significantly below the official rate of inflation, the CPI. Barring any shocks to the supply chain, we expect shop prices to remain fairly stable in the medium term.' A point to note is that the CPI and SPI do not measure the same data.

Some examples of non-food price deflation in September are clothing & footwear dropping by 8.9 percent, Electricals falling by 3.5 percent and Furniture & floor coverings by 2.3 percent. Although health & beauty products went up by 1.2%, DIY & gardening rose by 1 percent and books, stationery & home entertainment went up by 0.4 percent.

Overall then the items that you have to buy to live (and live tolerably) appear to be rising and those that you can put off are falling – not surprising when money is tight for everyone.

Helen Dickinson, British Retail Consortium Director General, said:

"For the fifth month in a row our data shows that prices in the shops fell last month. Deflation in September was driven by non-food items and in fact, we've only seen one month since January 2012 which has been inflationary for non-food.

"Retailers have used deep discounts and promotions particularly in audio and visual equipment and men's and children's clothing.  This is further evidence of the continuing pressure on margins across the sector. 

Busy Shopping Street

People Out Shopping

"In food, inflation remains below trend, but was slightly higher in September than in August. Ambient food, rather than fresh, showed the more significant increases in prices. While there was a slowing of inflation in bread and cereals, this was off-set by rising inflation in non-alcoholic beverages and sugar, jam and chocolate."

Mike Watkins, Head of Retailer and Business Insight, Nielsen, said:

"There are some inflationary cost pressures in the food supply chain that had an impact on the small upward movement in shop price inflation in September. However promotional savings and the use of coupons continue and this is helping shoppers to budget and seek out the best deals. With consumers still uncertain about when and where to spend, we expect competition for discretionary spend to intensify in both food and non-food retailing, as we head towards the end of the year."

Comment Here!