The British Retail Consortium (BRC) has reported that overall shop price inflation slowed marginally to 1.0% in September 2012, compared to 1.1% in August.

However, food inflation was unchanged at 3.1% for the third consecutive month as deflation in non-food increased to 0.2% from 0.1% in August.

British Retail Consortium Director General Stephen Robertson said falling prices for non-food goods and stable food inflation are slowing overall shop price rises

"Food inflation remains at a two-year low for the third month running despite inflationary pressures building up in the supply chain from rises in global commodities such as wheat and soyabeans," Robertson added.

"These shop price figures show retailers are holding back much of the impact as they battle it out for every bit of spending available from hard-up customers."

"Promotions, including multi-buy offers, fuel coupons and price matching are commonplace and helping to keep grocery bills down while non-food prices have now been cheaper than a year ago for eight months in a row as prices of furniture, electricals and clothing are cut to generate sales."

BRC Retailer Services senior manager Mike Watkins added that over the last month, the firms had seen some welcome stability in food retailing and sales growths have improved a little compared with the early summer.

"Retailers have maintained the high levels of promotional activity at 35 per cent of sales and food inflation remains at a two-year low point at just over three per cent" Watkins added.

"This will be helping shoppers to plan with more confidence when juggling their household budgets."