UK shop prices fell by 2 percent in August, falling at a fast rate than the 1.6 percent decline in July, according to the latest figures from the British Retail Consortium and Nielsen in the monthly shop price index.
Non-food deflation accelerated to 2.5 percent in August, from 2.2 percent in July, while food prices continue to fall, dropping 1.1 percent in August, from 0.8 percent in the previous two months.
British Retail Consortium chief executive, Helen Dickinson, said: “The devaluation of sterling in wake of the referendum will put upward pressure on shop prices. But that’s likely to take several months to properly feed through, given that retailers won’t feel the brunt of the cost increases until existing contracts with foreign suppliers come to an end. Even then, retailers will have to make a decision about when and how much to pass onto consumers.”
Nielsen head of retailer and business insight Mike Watkins, added: “Competition for discretionary spend is likely to intensify as we head towards the end of the year, so retailers will be keen to keep prices low and promotions sharp.”