Food inflation in August remained at the lowest level ever recorded, according to a new report.

The British Retail Consortium (BRC)-Nielsen Shop Price Index revealed that food inflation remained at 0.3% in August, the lowest ever recorded since the survey began in December 2006. Overall food inflation has averaged 1.3% over the past 12 months.

Fresh food inflation fell in August to 0.1% and is currently at its lowest level since June 2010 while ambient food inflation rose to 0.6% from 0.2% in July.

Overall Shop Price Inflation dropped by 1.6% in August, slightly less of a decline seen in July (-1.9%).

British Retail Consortium director general Helen Dickinson said: “Shop prices reported deflation of 1.6% in August and marked sixteen consecutive months of falling shop prices for consumers. Clearly retailers are continuing to help drive down the overall inflation rate. The summer months saw retailers provide plenty of attractive offers on fresh food goods which saw their lowest level of inflation this year, with vegetables, fish and also milk, cheese and eggs contributing to the downward pressure.”

Nielsen head of retailer and business insight Mike Watkins said: “For supermarkets there was an opportunity to capitalise on the improved summer weather by keeping prices low, to tempt shoppers to spend a little more on food and drink. With the trading environment still challenging, all retailers will now be keen to keep prices as competitive as possible to encourage consumers back into store after the summer holidays.”

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