Shop prices fell at the beginning of January as retailers cut prices to clear leftover Christmas stock.
Overall, shop prices fell by 1.7 per cent year-on-year between 3 January and 9 January, according to figures from the British Retail Consortium (BRC) and Nielsen.
Price cuts were particularly dramatic in clothing and footwear, with prices falling by 6.3 per cent year-on-year. Electrical goods prices fell by 2.4 per cent.
For the most part, retailers have so far been able to protect consumers from price rises relating to the fall in the value of the pound, but it is thought prices will rise when retailers' currency hedging runs out.
Helen Dickinson, chief executive of the BRC, said: "Fluctuations in the monthly figures belie an underlying trend of building cost pressures that are gradually feeding through from the fall in sterling combined with higher commodity prices.
"This will inevitably mean that we start to see a general upward trend in inflation over 2017."
Food prices increased 0.6 per cent month-on-month, but this was counteracted by the intense discounting on non-food items, Dickinson said.
As cost pressures increased for retailers throughout last year – mainly due to increasing labour costs – the industry was forced to cut jobs. Analysts have predicted tough times ahead for the sector, as currency hedging will run out this year, and the national living wage is set to increase again in April.