Food Price Inflation Seen Bottoming as Non-Food Deflation Contracts

According to the latest edition of the BRC-Nielsen Shop Price Index, published today:

• The overall index reported a zero rate of inflation in October, largely unchanged from last month’s 0.1% rate of deflation.
• Food inflation remained at an annual rate of 2.5% for the second consecutive month. Month-on-month it was -0.1%.
• Non-food price deflation shrank to 1.3% year-on-year, down from 1.4% in September.

Commenting on the figures Stephen Robertson, Director General of the British Retail Consortium, said:

“The price of non-food goods has been deflationary for eleven months in a row – with the biggest falls in clothing, footwear and electricals.

“Christmas is lining up to be a punch-up between retailers as they battle it out for market share. Customers can reap the benefits from all the promotions and discounts.”

Mike Watkins, Senior Manager, Retailer Services, Nielsen commented:

“Fresh food inflation now seems to have bottomed out while ambient foods have slowed again to 4.3%. However, we don’t anticipate seeing price deflation in the grocery market like we have seen in the non-food channel. Non-food has remained deflationary for 11 successive months which has largely been the result of the VAT reduction and consistently weak demand.”

Press Release: British Retail Consortium.

Note: The SPI is administered by Nielsen, who collate and analyse the data on behalf of the BRC.

The index provides an indicator of the direction of price changes in retail outlets. The BRC launched the Shop Price Index to give an accurate picture of the inflation faced by shoppers on 500 of the most commonly bought items in shops which are representative of the most commonly shopped in stores.

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