Food promotions and back-to-school discounts helped contain price rises as retailers faced higher operating costs.
UK shop price inflation eased to 1.4% in September 2026, down from 1.5% in August, as retailers maintained promotions and introduced price cuts to support demand.
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The BRC-NIQ Shop Price Index, produced by the British Retail Consortium (BRC) and consumer intelligence company NIQ, showed that shop prices remained higher than a year earlier. Overall prices increased by 0.1% month on month, although food prices fell by 0.2%.
BRC chief executive Helen Dickinson attributed the slowdown to continued competition and discounting, while warning that retailers have limited capacity to absorb further cost increases.
Food inflation slows to 2.5%
Annual food inflation fell to 2.5% in September, from 2.8% in August.
Fresh food inflation eased to 2.6% from 3.0%, while inflation for ambient food – products that can be stored at room temperature – slowed to 2.2% from 2.5%.
Dickinson said promotions helped reduce the prices of meat and dairy products. However, poor harvests in parts of Europe pushed up fruit prices, while high global commodity prices kept chocolate and confectionery prices elevated.
Non-food inflation also eased, falling to 0.8% from 0.9% in August.
Discounts on back-to-school products, including books, stationery, footwear and electrical goods, helped contain prices, according to Dickinson.
Cost pressures persist ahead of year-end trading
Despite slower shop price inflation, retailers continue to face higher operating costs.
The BRC said retailers were dealing with increases in employment costs, energy bills and packaging taxes.
“Retailers have absorbed wave after wave of extra costs, but there is a limit to what businesses can shoulder,” Dickinson said.
The pressure comes as retailers enter the final quarter of the year, traditionally an important trading period because of seasonal shopping and Christmas demand.
Mike Watkins, head of retailer and business insight at NIQ, said sales growth had slowed after the summer as shoppers reassessed their spending in September.
Many retailers continued to use promotions, while some introduced price cuts to stimulate demand, he said.
Watkins expects household budgets to come under tighter pressure between October and December. This could leave retailers facing continued pressure to absorb higher costs while keeping prices competitive.
The September figures highlight the balance retailers are currently trying to maintain: controlling prices to support consumer demand while managing rising costs across their businesses.
