Shop prices in deflation for first time in almost three years
Period Covered: 01 – 07 August 2024
- Shop Price deflation was at 0.3% in August, down from inflation of 0.2% in the previous month. This is below the 3-month average rate of 0.0%. Shop price annual growth remained at its lowest rate since October 2021.
- Non-Food remained in deflation at -1.5% in August, further down from -0.9% in the preceding month. This is below the 3-month average rate of -1.1%. Inflation is at its lowest rate since July 2021.
- Food inflation slowed to 2.0% in August, down from 2.3% in July. This is below the 3-month average rate of 2.%. The annual rate continues to ease in this category and inflation is at its lowest rate since November 2021.
- Fresh Food inflation slowed further in August, to 1.0%, down from 1.4% in July. This is below the 3-month average rate of 1.3%. Inflation is its lowest rate since October 2021.
- Ambient Food inflation decelerated to 3.4% in August, down from 3.6% in July. This is below the 3-month average rate of 3.7% and is the lowest rate since March 2022.
| Overall SPI | Food | Non-Food | ||||
| % Change | On last year | On last month | On last year | On last month | On last year | On last month |
| Aug-24 | -0.3 | 0.0 | 2.0 | 0.2 | -1.5 | -0.1 |
| Jul-24 | 0.2 | -0.1 | 2.3 | 0.1 | -0.9 | -0.2 |
Note: Month-on-month % change refers to changes in the level of prices.
Helen Dickinson OBE, chief executive of the BRC, said: “Shop prices fell into deflation for the first time in nearly three years. This was driven by non-food deflation, with retailers discounting heavily to shift their summer stock, particularly for fashion and household goods. This discounting followed a difficult summer of trading caused by poor weather and the continued cost of living crunch impacting many families. Food inflation eased with fresh food prices, especially fruit, meat and fish, seeing the biggest monthly decrease since December 2020 as supplier input costs lessened.”
“Retailers will continue to work hard to keep prices down, and households will be happy to see that prices of some goods have fallen into deflation. The outlook for commodity prices remains uncertain due to the impact of climate change on harvests domestically and globally, as well as rising geopolitical tensions. As a result, we could see renewed inflationary pressures over the next year.”
Mike Watkins, head of retailer and business insight, NielsenIQ, said: “Shop price inflation has fallen again in August as many non-food retailers have kept promotional support due to the unpredictable weather and food retailers have introduced more price cuts to help drive incremental sales during the ‘summer of sport’.”