Shop price inflation droops to 38-month low in January 2013

Ben Southwood
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PRICE rises in shops were recorded at their slowest rate in over three years in January, according to data out this morning.

Shop inflation ran at just 0.6 per cent over the year to last month, according to figures from the British Retail Consortium (BRC), the lowest rate since November 2009.

This impressively low number came from sharp discounting in non-food prices, particularly electronics and clothes, BRC boss Helen Dickinson said.

“The 1.4 per cent year-on-year fall in non-food prices was driven by cheaper clothing and electricals,” Dickinson said. “Promotions were not as widespread as last year, but where discounts were applied, they were deeper.”

Clothing firms needed to make the sharp cuts – bringing prices down 7.7 per cent on the year, the biggest fall since the survey began – she said, because demand was so weak in the sector.

On the other hand food price inflation was stubbornly high, edging down only a 10th of a percentage point from 4.1 per cent to hit four per cent over the year to January. This small fall came from a slight easing down in commodity prices, Dickinson said. The release pointed to falling sugar, corn, soya bean, cocoa and coffee prices.