Retailers slashed prices in December to tempt shoppers to spend in the run-up to Christmas following a challenging year for the beleaguered UK high street.
Shop prices fell 1.8 per cent last month – the same rate of decline as in November – driven by discounting among the firms hit hardest by the pandemic, such as fashion retailers.
Non-food prices were down 3.2 per cent in December compared to a decline of 3.7 per cent the previous month, which is below the the 12-month average price decline of three per cent.
Food inflation eased to 0.4 per cent in the crucial Christmas trading period, down from 1.3 per cent in November, as supermarkets cut prices to beat competitors.
Fresh food prices dropped 0.9 per cent – marking the first fall in almost four years.
Meanwhile, ambient food inflation slowed to 2.3 per cent in December, down from 2.5 per cent in the previous month.
BRC chief executive Helen Dickinson said: “It was welcome news for shoppers in the run up to Christmas as prices fell in December.
“As in November, non-food prices dropped, and retail firms who have been hardest hit by the pandemic this year, such as fashion outlets, are continuing to offer discounts.
“Notably, food inflation eased to its lowest since March 2018, with a significant fall in fresh food prices.
“This was largely driven by last year’s decrease in global food prices filtering through onto British shelves, as well as the fierce competition between supermarkets to offer customers the best value, quality goods in the face of testing circumstances.”