Prices at the tills were lower in May than during the same month last year the first time the average cost of goods has fallen on an annual basis since late 2009.
New statistics from the British Retail Consortium showed that overall shop prices fell last month when compared to 12 months earlier, continuing the month-on-month slide which started this April.
The news is bound to cheer cash-strapped consumers, while retailers will hope that the potential of lower prices will drive customers into their stores.
BRC director-general Helen Dickinson said shops had been using promotions and offers in a bid to shift seasonal stock which did not sell during the spring cold snap.
“Non-food deflation accelerated to its lowest level in almost four years, a reflection of the intense competition to capitalise on improving consumer confidence and the late onset of warmer weather,” she said.
“Widespread discounting in the furniture sector drove strong sales as customers were feeling more positive about making major purchases but still on the hunt for a good deal.”
She said offers had also led to food inflation slowing to its lowest level since June 2010, while falling commodity costs following improved wheat and corn harvests had also eased price pressures.
“Times remain tough, but it seems that retailers are reading the market well and doing what they can to offer customers the best possible value on their shopping,” Ms Dickinson added.
Figures released today show that while food prices continued to climb, by 2.4% year-on-year, non-food items offset the rise by falling back by 1.5%.
That led to average prices in the shops dropping by 0.1%.
Prices fell by the same proportion on a month-on-month basis, as a non-food slip of 0.2% counteracted a 0.1% rise in food costs.
Mike Watkins, head of retailing and business insight at research firm Nielsen, said shoppers continued to depend on vouchers and coupons.
“Nevertheless, with food inflation slowing as we finally start summer, the outlook for the next three months is looking much brighter,” Mr Watkins added.
business@thecourier.co.uk