Shopping crowd

Overall shop prices fell 0.5% in July, BRC-Nielsen figures have shown

Food price inflation slowed down in July, hitting its lowest rate since summer 2010, new figures have shown.

Year on year, food inflation ran at 2.2% in July, down from 2.7% in June, the BRC-Nielsen Shop Price Index revealed today.

Overall shop prices fell 0.5%, while non-food prices dropped 2.1%.

The slowing of food inflation was driven by falling costs of vegetables, fish and meat, which offset a rise in the cost of breads and cereals.

“Shop prices have now fallen for three consecutive months compared with last year and July’s rate showed the biggest drop for six and a half years,” said the British Retail Consortium’s director general Helen Dickinson.

“It shows just how hard retailers are working to serve their customers and underlines how deep the promotions and discounts from retailers are at the moment.”

Nielsen’s head of retailer and business insight Mike Watkins said: “Whilst the 2013 heatwave is bringing strong sales uplifts for food retailers, it’s holding back some non-food sales growth, so the welcome slowdown in shop price inflation in July should benefit most retailers and help to kick-start consumer demand as we enter the peak holiday period.”

In the food sector, fresh food inflation fell from 2.8% in June to 2% in July, while ambient food fell marginally from 2.5% to 2.4%.

In non-food, health & beauty and stationery bucked the trend and showed price rises, while the sharpest falls were reported in clothing & footwear, with prices plunging by 9.7%, compared with a drop of 6.7% in June.

“There has been significant discounting of clothing and footwear across women’s, men’s and children’s categories.  Anyone who’s been waiting to update their wardrobe would be well advised to look at some of the deep discounts that are currently available,” said Dickinson.