Price cuts ‘deeper and wider’
Retailers continued to cut prices last month, setting a new record for deflation. Overall shop prices reported deflation for the ninth consecutive month in January, accelerating to 1.0% from 0.8% in December, according to the British Retail Consortium-Nielsen Shop Price Index. This is the deepest level of deflation since the series began in December 2006.
Non-food reported annual deflation of 2.7% in January from 2.3% in December while food inflation slowed to 1.5% from 1.7% in December.
'Shop prices are falling at their fastest rate for seven years, a new record for our data. 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. Our figures show that there have been particularly good deals to be had in clothing, furniture and electrical items this month as retailers prepare for their new collections,' says Helen Dickinson, BRC director general.
'Hard pressed families will also have benefitted from the lowest levels of food inflation in almost four years. Our food retailer members have managed to keep prices low again and with relatively stable commodity prices at the moment as well, and forecasts for commodities quite upbeat, we may continue to benefit from this for some time yet.'
Mike Watkins, Nielsen head of retailer and business insight says: '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, the fall in shop price inflation will be a welcome boost for consumers.'