The British Retail Consortium (BRC) is indicating that overall U.K. retail store price inflation remained at 2.7 percent in September. Food inflation was unchanged at 5.0 percent in September . Non-food inflation fell to 1.3 percent in September from 1.4 percent in August.
“The pressures on prices from world commodities, import inflation and January's VAT rise haven't gone away but they haven't worsened either,” said BRC Director General Stephen Robertson in a release.
“Shop price inflation is stable and well below the Consumer Price Index, the Government's official measure of inflation.
“The Bank of England expects CPI to go on rising but that's due to things like utilities, petrol and insurance not shop prices. In fact some goods clothing and electricals continue to be cheaper than a year ago as retailers discount aggressively to produce sales and stay in business.
“Fundamental conditions are unlikely to change much this side of Christmas but next month we'll see what effect the supermarket price war – based on straight price cuts rather than other forms of promotion is having on food inflation.”
Mike Watkins, Senior Manager, Retailer Services, Nielsen comments:
“While food inflation continues to account for the majority of the upward pressure on shop prices, some of the intensity has now gone away. While food prices remain five per cent higher than a year ago, it certainly looks as if the peak of 2011 will be a lot lower that than the high of over eight per cent that we saw at the start of the economic downturn three years ago. And shoppers continue to get further savings from promotions and price discounts at the checkout, which in turn is bringing down the cost of the shopping trip.”
