Fastest Price Drop Since June 2018: Non-Food Goods Lead the Way

  • Shop prices fell by 0.4% in August compared to a 0.1% decrease in July
  • Non-food prices declined at the fastest rate since June 2018
  • Food inflation eased slightly to 1.6% from 1.7% in July
  • Overall prices fell into deflationary territory due to non-food goods
  • Promotional activities by supermarkets slowed down price increases for certain categories
  • Weak consumer spending and stiff competition contributed to the decline
  • Unseasonable weather and end of season discounts impacted retailers in August

UK shop prices fell by 0.4% in August, compared to a 0.1% decrease in July, according to the BRC-Nielsen Shop Price Index. This is the fastest rate of decline since June 2018 and below the 12-month and six-month average price increases of 0.3%. Non-food prices dropped by 1.5%, the quickest pace since the same month in 2018, while food inflation eased to 1.6% from 1.7% in July, below the respective averages of 1.8% and 1.9%. The British Retail Consortium (BRC) revealed that overall prices were pushed into deflationary territory by non-food goods’ faster decline. Out of seven non-food categories, three experienced deflation. Inflationary pressures in the food supply chain have not yet reached shop prices, as per Nielsen. Weak consumer spending and stiff competition kept prices down, but a no-deal Brexit could reverse this trend. Unseasonable weather early in August and vouchering by supermarkets contributed to retailers’ challenges.

Factuality Level: 9
Factuality Justification: The article provides accurate information from a reliable source (BRC-Nielsen Shop Price Index), presents data and statistics, and includes expert opinions from industry professionals. It also discusses potential future impacts of Brexit on prices.
Noise Level: 7
Noise Justification: The article provides relevant information on the decline of shop prices and factors contributing to it, but could benefit from more analysis or context on the potential impact of a no-deal Brexit and further exploration of consumer behavior.
Financial Relevance: Yes
Financial Markets Impacted: UK retailers and supermarkets
Financial Rating Justification: The article discusses changes in UK shop prices, which can impact consumer spending and affect the financial performance of retailers and related companies.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no mention of an extreme event in the text.

Reported publicly: www.retailsector.co.uk