For the second consecutive month, shop price deflation has remained 0.1 percent. According to figures from the British Retail Consortium (BRC) and Nielsen, September and October saw the shallowest rate in the last four years.
Non-food products saw deflation of 1.5 percent. October’s food prices recorded the same increase as in September, 2.2 percent.
Helen Dickinson OBE, Chief Executive, British Retail Consortium, said: “Shop price inflation remains unchanged from last month, just inside deflationary territory. While still falling year on year, the SPI is a measure focussed on basic, entry level goods, so any upward movement in inflation indicates mounting inflationary pressures elsewhere in the consumer spending basket.
“Forces on inflation are pulling in both directions. On the one hand global food prices continue to head upwards at the same time as the weaker pound has left retailers facing significantly higher bills for imported goods. On the other hand, the tightening squeeze on discretionary spending power is reducing the ability of retailers to pass on increased import costs.”
Mike Watkins, Head of Retailer and Business Insight, Nielsen, added: “Disposable income is coming under pressure however consumers are benefiting from the continuation of promotional activity, the use of vouchers and price cutting, in particular by supermarkets.
“This is going some way towards making up any shortfalls in spending power as cost price inflation begins to impact prices. Non food retailers have also been combating unseasonable weather and weakening consumer demand which means price points are being kept sharp for the season”