Prices fall as retailers ramp up discounting to entice shoppers
Shop prices fell in August as retailers continued to offer discounts in a bid to entice shoppers back onto high streets.
Prices fell 1.6 per cent last month, compared to a drop of 1.3 per cent in July, driven by a decline in non-food prices which were down 3.4 per cent.
Retailers have slashed prices in order to tempt consumers back into stores following the UK coronavirus lockdown.
British Retail Consortium chief executive Helen Dickinson said: “The faster rate of decline was driven by cheaper non-food goods, as many retailers have continued to run promotions and sales in order to entice customers to spend and make up for lost ground during lockdown.”
Food inflation eased to 1.3 per cent, down from 1.5 per cent the previous month, due to the availability of fresh, seasonal produce.
Supermarket sales were per buoyed by the number of families staying in the UK over the summer holidays.
Fresh food inflation slowed to 0.2 per cent and ambient food inflation increased to 2.8 per cent in August, according to the latest BRC-Neilsen research.
However, experts warned that lower prices were under threat from costs associated with coronavirus safety measures and the uncertainty over a trade deal between the UK and the European Union.
Dickinson added: “The absence of a tariff-free deal will lead to higher prices for consumers as thin retail margins force retailers to raise prices in response to higher import costs.
“Furthermore, without a deal that reduces checks and red-tape, the UK supply chain faces severe disruption, reducing the availability of goods and further raising prices for consumers.”