Shop price deflation fell by 0.2% in the month of September 2013, as against 0.5% drop in August.

Food inflation increased to 2.9% in September, as compared to 2.5% in August while the prices of non-food products plunged 2%, as against a 2.3% drop in August.

British Retail Consortium director general Helen Dickinson said the prices have fallen for the fifth month in a row.

"Deflation in September was driven by non-food items and in fact, we’ve only seen one month since January 2012 which has been inflationary for non-food. 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," Dickinson added.

The agency noted that inflation in food remains below trend, however it grew marginally in September than in August.

Compared to fresh foods, ambient food showed more significant increase in prices. 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.

Retailer and Business Insight head Mike Watkins said 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.

He further added that the competition for discretionary spend is expected to heat up as cautious consumers are budgeting their purchases through promotional savings and the use of coupons to seek out the best deals.