UK sales
UK shop prices are down says British Retail Consortium (Reuters)

Britain's shop prices have fallen for the fifth consecutive month after retailers tried to reel in more punters with promotional deals on non-food related products.

According to the latest figures by the British Retail Consortium (BRC), the biggest fall in prices was in non-food related items that saw an annual fall of 2% in September, from 2.3% in August.

"For the fifth month in a row our data shows that prices in the shops fell last month. Deflation in September was driven by non-food items," said Helen Dickinson, director general at BRC.

"Retailers have used deep discounts and promotions particularly in audio and visual equipment and men's and children's clothing.

"This is further evidence of the continuing pressure on margins across the sector."

Food Prices Up

However, food prices increased to 2.9% in September, from 2.5% in August.

These have been identified as a concern for British consumers by Labour's Ed Miliband as part of the UK's cost of living crisis.

Dickinson drew to attention to what type of food products have been getting more expensive.

"Ambient food, rather than fresh, showed the more significant increases in prices," said Dickinson.

"While there was a slowing of inflation in bread and cereals, this was off-set by rising inflation in non-alcoholic beverages and sugar, jam and chocolate."

Why Is Food Up?

Mike Watkins, head of retail and business insight at Nielsen explained the food cost increase.

"There are some inflationary cost pressures in the food supply chain that had an impact on the small upward movement in shop price inflation in September."

Yet, Watkins offered some good news about the behaviour of consumers in dealing with high food high prices.

"However promotional savings and the use of coupons continue and this is helping shoppers to budget and seek out the best deals. With consumers still uncertain about when and where to spend, we expect competition for discretionary spend to intensify in both food and non-food retailing, as we head towards the end of the year."