Food prices drop as supermarkets battle it out for cheapest grocer in the UK

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Food prices were deflationary in November for the first time since records began in December 2006, according to the British Retail Consortium.

The retail group said non-food prices also fell on last year, which means that overall shop prices have been deflationary for 19 consecutive months.

The latest BRC-Nielsen 
Shop Price Index out today shows that November equalled the record low deflation of 1.9 per cent reported in July 2014. Food prices fell 0.2 per cent in November.

​​Helen Dickinson, British Retail Consortium ​d​irector ​g​eneral, said: “We also saw the first rise in real incomes for over five years.

​“​Downward pressure from falling shop prices pushed the overall rate of inflation in the economy below the rise in average wages. With the recovery in the labour market robust, the outlook for further rises in real incomes looks positive.​“​

​The report claimed that f​alling commodity prices, 
particularly oil, suggest the outlook for inflation remains benign.

The price of oil, ​at ​a near five year low, has a significant impact on the costs of producing food​ and has an impact on everything from the cost of feed to transport.

​“​Given the intensity of competition in the food sector, these savings have been passed on to consumers in the form of lower prices​,” said Ms Dickinson​.