UK shop prices cool as retailers roll out early Halloween discounts

Shop price inflation slowed in October as retailers rolled out early discounts ahead of Halloween and the Black Friday sales period, signalling easing price pressures across the UK high street.

Figures from the British Retail Consortium (BRC) and NIQ showed that overall shop prices rose 1% year-on-year, down from 1.4% in September and below the three-month average of 1.1%.

Non-food prices continued to decline, falling 0.4% year-over-year, compared with a 0.1% drop in September, reflecting early promotional activity in categories such as electronics and health and beauty. Food inflation also cooled, easing to 3.7% from 4.2% the previous month.

Food prices, however, were mixed. Fresh food inflation edged higher to 4.3%, up from 4.1%, while ambient food inflation, covering items such as confectionery and canned goods, fell sharply to 2.9%, from 4.2% in September.

“Overall shop price inflation slowed in October, driven by fierce competition among retailers and widespread discounting,” said Helen Dickinson, chief executive of the BRC.

“While food inflation remains high, especially for fresh food where prices continued to rise, it eased for ambient goods. Easing global sugar prices helped to bring down prices of chocolate and confectionary, a treat for those preparing Halloween parties.”

Read more: UK inflation holds unexpectedly at 3.8% in September

Dickinson added that the recent International Monetary Fund (IMF) warning that UK inflation would be the highest in the G7 underscored the need for policy support.

“With the budget less than a month away, the chancellor has an opportunity to relieve some of the pressures that are keeping the cost of essentials high,” she said.

“Labour’s promised business rates reform must deliver a meaningful cut to retailers’ rates bills, and ensure that no store pays more. Rising employer National Insurance Contributions and a new packaging tax have directly contributed towards rising inflation, according to the Bank of England. Adding further taxes on retail businesses would inevitably keep inflation higher for longer.”

Mike Watkins, head of retailer and business insight at NIQ, noted that while inflation had moderated, shoppers remained cautious. “Inflation is higher than a year ago, and with pressure on household budgets and weak sentiment, retail spend continues to be subdued,” he said.

“However, food retailers are in a battle for market share, and many are offering targeted price cuts, and non-food retailers will wish to avoid any price increases over the next couple of months.”

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