Shop prices still dropping with fastest fall on record reported
JANUARY was the ninth straight month of shop price deflation in the UK, with prices falling at the fastest rate ever recorded by the British Retail Consortium (BRC) and Nielsen.
Shop prices dipped by one per cent in the year to January, driven by a 2.7 per cent fall in non-food prices. The drop in prices is now the largest since the BRC began collecting figures on retail prices in 2006.
Food inflation is still running at 1.5 per cent, one of the lowest levels recorded during the past four years. The BRC and Nielsen also note that many commodity prices have fallen significantly in the last year, holding the cost of food at a more stable level.
Corn prices fell 38 per cent in the 12 months to mid-January and wheat dipped by a quarter over the same period.
Clothing and footwear saw the biggest price drop of any non-food items, with a 9.9 per cent slump since January 2013.
“The start of 2014 has seen a continuation of both slow retail growth particularly in food, and a continuation of slowing inflation. With the first few weeks of January a time when many households take stock of personal finances,” said Mike Watkins, Nielsen’s head of retail and business insight.
Many analysts projected a meagre Christmas season for retailers, but official statistics suggest that sales held up during December, up by 5.3 per cent from the same month in 2012.
BRC director general Helen Dickinson added: “January is always a key month for sales and promotions but discounts have been deeper and more widespread than last year and we are seeing this trend continuing.”