According to the British Retail Consortium, food prices dropped by 0.2% – the first fall since the BRC started collecting price data.
Helen Dickinson, BRC's director general, said overall shop prices, including non-food, had also reduced, falling 1.9% compared to the same period in 2013.
She said with the "first real rise" in incomes for more than five years and a recovering labour market, the outlook for retailers looked positive.
"We’re seeing the big supermarkets investing in price cuts worth millions of pounds during a hugely competitive period in the food market," she said.
"With food prices down, wages up, a highly competitive market keeping inflation low and Christmas around the corner, there are plenty of good reasons to assume a strong trading period lies just head of us".
However the head of retailer and business insight at Nielsen warned retailers were facing a slow start to the Christmas trading period with high street footfall reliant on deep discounting and promotions.
As a result, "savvy" Christmas shoppers could expect very competitive prices from food retailers over the festive season as they compete to win customers over the crucial trading period.
