Shop prices fell at the highest rate of decline since May 2018 in September, as food inflation eased to 1.1%, according to new data.

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The British Retail Consortium (BRC)-Nielsen Shop Price Index showed that shop prices fell by 0.6% in September, compared to a 0.4% decrease in August.

Food inflation eased slightly in September to 1.1%, from 1.6% in August, while non-food prices fell by 1.7% in September, compared to August’s decrease of 1.5%.

Fresh food inflation rates halved in September to 0.7%, compared to 1.4% in August, while ambient food inflation slowed to 1.7% in September - the lowest inflation rate since June 2018.

BRC chief executive Helen Dickinson said the fall in shop price inflation can be attributed to “low consumer demand and stiff competition”.

“Non-food prices fell to their lowest since May 2018 as the effects of the 2016 currency depreciation finished filtering through the economy,” she said. “Food price inflation eased to a 17-month low reflecting both lower domestic prices for vegetables and lower global prices for meat.

“While consumers may welcome lower prices, falling consumer demand is squeezing retailers’ already tight margins. With business costs continuing to rise – including business rates, wage bills, and pension costs – the high street risks more big-name closures. Reform of business rates remains the most effective way government can support the retail industry – and they should grasp the opportunity with both hands.”

Nielsen head of retailer and business insight, Mike Watkins, added: “With consumers feeling uncertain about spending, retailers continue to focus on limiting price increases coming through the supply chain. Prices have fallen in non-foods helped by seasonal reductions and many food retailers have introduced price cuts to help regain momentum after a challenging summer.

“Competition for discretionary spend will intensify across all channels as we head towards the end of the year and we anticipate more promotional savings for shoppers and inspiring media campaigns that help to drive incremental sales.”