Even the national living wage can’t stop shops from cutting prices
Prices on the high-street fell in April, despite the introduction of the living wage, according to the latest shop price index from the British Retail Consortium (BRC), published today.
Retailers cut prices by 1.7 per cent over the past year — the same rate of discounting as a month earlier and the 36th consecutive period of falling prices.
Food prices edged up by 0.1 per cent over the past year, according to the monitor, exiting a two-month stint in deflation.
Read more: Shops failing to cash in on low inflation
Deflation “is being driven by intense competition across the industry. Hopefully today’s anniversary of falling prices will be a strong remedy to consumer confidence which has been weakened significantly since the beginning of the year,” said Helen Dickinson, chief executive of the BRC.
The BRC said that that raising prices to cover the costs of the national living wage was “not a step retailers want to take”, but that as the minimum wage for over 25s approaches £9 an hour by the end of the decade, it was hard to predict how long firms could hold off.