Non-food shop prices saw deeper deflation in September with significant reductions in categories like clothing and furniture driving overall shop prices down to their lowest rate since August 2021.

Shop price deflation accelerated to 0.6% in September, down from 0.3% in August, according to the latest data from the British Retail Consortium (BRC) – NielsenIQ Shop Price Index.

The rate of deflation during the period 1-7 September also fell below the three-month average of -0.3%, indicating a continuing trend of reduced shop prices.

The non-food category remained in deflation at -2.1% in September, compared to -1.5% in the previous month. This is also below the three-month average rate of -1.5% and marks the lowest inflation level since March 2021.

Non-food products, particularly in categories such as clothing and furniture, saw some of the largest price reductions as retailers offered significant discounts to attract shoppers.

British Retail Consortium (BRC) chief executive Helen Dickinson said “September was a good month for bargain hunters as big discounts and fierce competition pushed shop prices further into deflation. Shop price inflation is now at its lowest level in over three years, with monthly prices dropping in seven of the last nine months.”

Dickinson added that easing inflation would certainly be welcomed by consumers, but “ongoing geopolitical tensions, climate change, and government-imposed regulatory costs could all reverse this trend”.

She called on the UK government to introduce a 20% Retail Rates Corrector in the upcoming budget to level the playing field for retail properties, allowing retailers to maintain competitive prices, protect jobs, and encourage investment.

NielsenIQ head of retailer and business insight Mike Watkins added: “With non-food prices in deflation, this will help shoppers as they plan their household budgets for the rest of the year. Retailers will still need to focus on driving demand with attractive promotions over the next few weeks.”