Shop prices rising

basket of food

After five years of deflation, shop prices have increased year-on-year for the second consecutive month.

According to the BRC–Nielsen Shop Price Index for September, Shop Price inflation inched up to 0.2% from 0.1% in August. The index covers the 500 most commonly bought products in stores.

Non-Food deflation eased slightly in September to 0.9% from 1.0% in August, while Food inflation held steady at 1.9%.

Fresh Food inflation accelerated to 1.6% in September from 1.5% in August, as Ambient Food inflation slowed to 2.4% from 2.5%.

September was the second month in which Shop Prices recorded an increase, following a span of over five years of deflation. As expected, Food prices remained inflationary, the result of unusual weather patterns in the first half of the year. Non-Food deflation accelerated, with retailers less aggressive in discounting compared to a year ago.

Mike Watkins, Head of Retailer and Business Insight, Nielsen, said: “Looking ahead we expect shoppers to maintain their grocery spend by making savings elsewhere in their overall household expenditure.”