Shop prices still falling at fastest pace since 2007

PRICES of goods at the UK’s retailers are still shrinking, down by 0.5 per cent in the year to August – the joint-fastest rate since early 2007, six and a half years ago.

According to the British Retail Consortium (BRC) and Nielsen, deflation is still in swing, the 0.5 per cent drop being the same rate as in July.

A strong discrepancy between food and non-food prices remains obvious. Food prices are up 2.5 per cent in the same period, while non-food prices have slumped 2.3 per cent.

Some particular products drove prices down, with clothing and footwear priced 9.3 per cent lower than in August 2012, electrical items down by four per cent, and furniture and flooring dropping by 2.6 per cent.

BRC director Helen Dickinson commented: “There may be some pressures in the pipeline, but I would expect prices to remain fairly stable barring any major shocks in the supply chain.”

Dickinson added: “These figures certainly add to the recent run of rosier news, and confirm that retailers are working hard to offer customers the best possible value on their shopping.”

News earlier this week suggested that retailers had seen sales improve in August, rising by 3.6 per cent from 12 months earlier, following on from a strong performance in July.