Cost of the Christmas shop will be lower than it was three years ago

Helen Cahill
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Berlin Retailers Gear Up For Christmas
Black Friday has put pressure on prices (Source: Getty)

Despite the worries about rising prices post-Brexit, the family Christmas shop is set to be cheaper this year than it was three years ago.

Figures from the British Retail Consortium (BRC) and Nielsen showed that shop prices fell 1.7 per cent in November; the same level of deflation reported the month before.

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Food deflation came in at 0.8 per cent as the supermarket price war waged on. But, this was not as dramatic as food deflation in October, which was 1.2 per cent.

Black Friday wasn't part ofthe analysis, which covered the period from 7 November to 11 November. However, promotions in the period leading up to Black Friday and Cyber Monday hit prices on non-food items, which fell by 2.3 per cent overall.

Amazon was leading the price cuts in November, offering deals on smartphones, TVs and other electricals days before Black Friday started. Several retailers did not take part this year, however, seeking to protect their margins over the crucial Christmas shopping season. Asda opted out for the second year in a row.

“These figures once again point to retailers’ effectiveness in controlling the inflationary pressure that continues to build through the devaluation of the pound," said Helen Dickinson, chief executive of the BRC. "We have still yet to see any visible impact from the weaker pound on shop prices, but we do expect to see a gradual slowing of the rate of deflation."

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Mike Watkins, head of retailer and business insight at Nielsen, said: "Shop prices are still falling and deflation will continue to at least the end of the year, as the result of the battle for the wallet of Christmas shopper.

"Looking ahead, we can expect a slow return to shop price inflation during 2017 with fresh foods, some of which are also seasonal and weather dependent, likely to be impacted sooner when increased supply chain costs finally begin to filter through to retail prices."

November shop price changes by category

Category Price change on last year (%) Price change on October (%)
Clothing and footwear -7.1 -1.2
Furniture and floorcovering -1.8 -0.8
Electricals -2.8 -0.7
DIY, gardening and hardware -2.1 -0.5
Books, stationery and home entertainment 2.1 -0.1
Health and beauty 0.3 0.4

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