Shop prices still lower than last year

The BRC Shop Price Index (SPI) inflation rate for August showed that prices are 0.48 per cent lower than at this time last year. The overall index stands at 100.68, up only slightly from July, when prices were at their lowest level for almost two years.

Food prices are 1.26 per cent up compared with last year, while the price of non-food items showed a decrease of 1.55 per cent compared with this time last year.

Overall, shop prices in August increased 0.19 per cent from July. This was mainly as a result of the price of non-food items increasing by 0.68 per cent.

BRC director-general Kevin Hawkins said: 'Even with the recent heavy discounting and sales promotions coming to an end, intense competition in the retail market and weak consumer confidence continues to keep prices low.'

In August, the price of food items showed a decrease of 0.64 per cent compared with July, to reach 114.36. Price competition among the larger supermarkets drove down the cost of cold meats, pasta and rice, while discounting on alcohol, especially lager and beer, caused prices to fall compared with previous months.

The prices of non-food items increased 0.68 per cent from July. Heavy discounting and sales promotions seen in recent months ended in August, but discounting and sales promotions continued on kitchens, kitchen equipment, bathrooms, furniture and furnishings and DIY products.