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Overall shop prices reported an increase in deflation to 1.4% in July from 1.3% deflation in June, according to the BRC-Nielsen Shop Price.

The continued deflation was driven by non-food where deflation accelerated 0.4 percentage points to 2.3%. Food ticked up to report annual inflation of 0.1% from deflation of 0.4% in June – the first inflationary rise for food prices for seven months.

The return to inflation for food is significantly above the record low level of -1.9% seen in May this year.

BRC director general, Helen Dickinson, said: “Shop prices fell by 1.4 per cent this month marking the 27th consecutive month of prices drops which is good news for consumers.

“In the three months to July, food prices fell by 0.4 per cent as the impact of past falls in oil but lower commodity prices and weaker demand in emerging markets helped support a continued deflationary environment. Annual food prices did rise very marginally this month, by just 0.1 per cent year-on-year, this is a short-term blip in the longer term downward trend, reflecting the on-going heightened levels of competition and it is not very significant.

Mike Watkins, head of retailer and business insight, Nielsen, added: “In food retailing, whilst ambient prices are becoming more stable, many fresh foods are again cheaper than this time last year and there have been some attractive sales and offers across non-food retailing in recent weeks. Shoppers are saving money which is helping consumer spend in the wider economy.”

Morning update

Nivea-maker Beiersdorf increased both its sales and earnings, and gained market share in the first half of the year. Organic sales climbed 1.4%, while reported sales rose 7.3%, from €3.2bn to €3.4bn. Group EBIT excluding special factors increased by 12.4%, from €452m to €508m.

Stefan Heidenreich, CEO of Beiersdorf said: “Beiersdorf has continuously increased its effectiveness over the past months. At mid-year, we have exceeded last year’s excellent results. Our business strategy has proven itself in a challenging market environment. We are expecting further accelerating growth in the second half of the year.”

The FTSE 100 has opened 0.2% up this morning to 6,698.9pts.

Tesco (TSCO) is 0.2% up this morning to 211.2p and M&S (MKS) is 0.3% up to 545.5p.

Yesterday in the City

It was a typically quiet August day for the FTSE yesterday, with the index falling just 2pts to 6686.6pts on thin trading.

London and Athens-listed Coca-Cola HBC (CCH) has so far survived the worst of the Greek stock sell-off, but plunged 5.7% yesterday to 1,268p after a broker note from Goldman Sachs gave it a sell rating with a target price of 1080p.

Elsewhere activity was more muted. The supermarkets trended slightly down, with Sainsbury’s (SBRY) falling 0.6% to 261.9p, Morrisons (MRW) down 0.5% to 180.9p and Tesco ~(TSCO) down 0.4% to 210.7p.

Just Eat (JE) fell 3.4% to 423p despite yesterday reporting revenues soaring 54% to £107.8m and underlying EBITDA up 62% to £25.8m in the six months to 30 June. Travel food group SSP (SSPG) was 1.8% down to 305.2p

On a day of few significant risers, British American Tobacco (BATS) and Compass Group (CPG) were both up by 1% to 3,821p and 1,029p respectively.

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