Shop price inflation slowed to 0.9% in July as retailers continued to use promotions and discounting to keep prices down despite mounting cost pressures, according to the latest figures from the British Retail Consortium.

The BRC’s latest Shop Price Index found overall shop price inflation fell from 1.2% in June to 0.9% in July. Non-food inflation also eased, dropping from 0.6% to 0.2%, while food inflation fell from 2.4% to 2.2%.

The report said widespread summer promotions helped keep prices in check, with discounts across food, clothing and footwear as retailers sought to drive demand and clear seasonal stock. However, some categories, including electricals and health and beauty, continued to see higher inflation due to rising chip prices and manufacturing costs.

Helen Dickinson, Chief Executive of the BRC, said: “Good news for households in July as shop price inflation slowed. Retailers competed hard to limit price rises, with a wave of summer promotions across food and other goods.”

She warned, however, that retailers continue to face significant cost pressures, including higher employment costs, packaging taxes, global instability and climate-related disruption.

Mike Watkins, Head of Retailer and business insight at NIQ, added that lower shop price inflation would provide some relief for consumers already facing higher household bills.

“Shop price inflation remains lower than a year ago, which will help shoppers as they manage other increases in household spend, such as energy and fuel. We can expect promotions to continue to be an important part of driving demand for the rest of the summer,” he said.

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