Period Covered: 03 – 07 August 2020

• Shop Prices fell by 1.6% in August compared to a decrease of 1.3% in July. This is below the 12- and 6-month average price decreases of 1.0% and 1.5%, respectively. 
• Non-Food prices fell by 3.4% in August compared to a decline of 2.9% in July. This is below the 12-and 6-month average price declines of 2.4% and 3.3%, respectively.
• Food inflation eased to 1.3% in August, down from 1.5% in July. This is below the 12- and 6-month average price increases of 1.4% and 1.4%, respectively. 
• Fresh Food inflation slowed to 0.2% in August, down from 0.9% in July. This is below the 12- and 6-month average price increases of 0.6% and 0.6%, respectively. This is the lowest rate of increase since February 2017. 
• Ambient Food inflation accelerated to 2.8% in August, up from 2.3% in July. This is above the 12- and 6-month average price increases of 2.6% and 2.6%, respectively.

Helen Dickinson OBE, Chief Executive, British Retail Consortium:

“Consumers will welcome another month of falling prices in shops. The faster rate of decline was driven by cheaper Non-Food goods, as many retailers have continued to run promotions and sales in order to entice customers to spend and make up for lost ground during lockdown. Meanwhile, the availability of fresh, seasonal produce has allowed food inflation to ease. 

“However, these lower prices are already under threat from increased costs associated with implementing coronavirus safety measures and are certain to rise if the UK ends the transition period without a trade deal with the EU. The absence of a tariff-free deal will lead to higher prices for consumers as thin retail margins force retailers to raise prices in response to higher import costs. Furthermore, without a deal that reduces checks and red-tape, the UK supply chain faces severe disruption, reducing the availability of goods and further raising prices for consumers. It is essential that the Government ensures the British public are front of mind in their negotiations, otherwise it will be consumers, retailers and the UK economy that will suffer.” 

Mike Watkins, Head of Retailer and Business Insight, Nielsen:

“With millions of families choosing to holiday in the UK this summer, supermarket sales remain buoyant with sales of fresh foods showing an uptick, helped by hot weather earlier in the month and slowing inflation as seasonal produce becomes available. This has offset some of the increases in ambient food and drink. However, deflation continues in much of non-food with retailers still unsure about the levels of demand for next seasons’ ranges.”