Shop prices continued to fall in October as retailers battle for consumers’ more limited spend amid the coronavirus pandemic.

Shop prices dropped by 1.2% in October, compared with a 1.6% decline in September, as retailers used discounting to drive sales.

This was below the 12-month average price decrease of 1.1%, but above the six-month average price decrease of 1.6%, according to the latest figures from the BRC and Nielsen.

Non-food prices fell by 2.7% in October compared with a decline of 3.2% in September, as tightened restrictions on socialising and a rise in unemployment meant consumers limited their spend on discretionary items.

This is in line with the 12-month average price decline of 2.7%, but above the six-month average of 3.4%.

Food inflation remained steady at 1.2% in October, driven by an acceleration in fresh food inflation of 0.4% for the month, combined with an easing of ambient food inflation of 2.3%.

BRC chief executive Helen Dickinson said: “Once again, it is good news for consumers with shop prices falling in October, albeit at a slower pace compared to the previous month. As the retail industry began to see sales bounce back, non-food prices saw the shallowest decline since the start of the pandemic.

“However, given the wider economic context, with stricter restrictions and a possible rise in unemployment, we are likely to see continuing discounts in non-food for months to come.

“Meanwhile, food inflation remained low as supermarkets fiercely competed with one another to offer the best quality goods at the lowest prices.”

Nielsen head of retailer and business insight Mike Watkins added: “With pandemic restrictions extended, shopping behaviour has been in a holding pattern as households adjust to new ways of working, living and spending.

“To help sales volumes, non-food retailers are limiting any price increases coming through the supply chain and food retailers are continuing with the lower prices introduced in recent weeks.

“And should the recession and the growth in unemployment have a further impact on consumer spend, we can expect shop price inflation to remain low for the rest of the year.”