Food prices have fallen by the steepest amount on record, figures released today show.
Food prices dropped by 0.5 per cent year-on-year in January, down from 0.1 growth in December, according to data released by the British Retail Consortium (BRC).
Meanwhile, overall shop prices saw deflation for the 21st month in a row.
Shop prices dropped by 1.3 per cent year-on-year in January, a slower rate of decline than the 1.7 per cent drop in December.
Non-food deflation slowed to 1.8 per cent year-on-year in January from 2.8 in December.
“Clearly customers were taking advantage of the January sales with good bargains for furniture, flooring and electricals resulting in plenty of stock shifting,” BRC director general, Helen Dickinson
With the outlook for inflation low, the jobs market robust and rising real incomes gathering pace, the outlook for consumer spending looks positive. Deflation does not always translate into bad news for retailers.
Dickinson also believes that the falling price of raw materials will be past on to consumers as retailers look to remain competitive.
“2015 is shaping up to be win-win year for shoppers and retailers alike.”