Shop prices edge up despite discounting

Shop Price inflation accelerated in December to 0.3 per cent, from 0.1 per cent in November, according to the latest British Retail Consortium (BRC) and Nielsen statistics.

This is the fourth month of inflation in five years and the highest inflation rate since April 2013.

Non-food deflation decelerated in December to 0.4 per cent from 0.8 per cent in November – the lowest rate of deflation since March 2013.

Food inflation decelerated marginally to 1.5 per cent in December from 1.6 per cent in November. Fresh food inflation slowed to 0.9 per cent in December, down from 1.2 per cent in November, while ambient food inflation accelerated to 2.3 per cent in December from 2.1 per cent in November.

BRC chief executive Helen Dickinson said that December’s shop price figures only serve to underline how tough conditions are in the retail industry. “Despite non-food goods being cheaper on average than last year, early indications suggest that retailers faced a challenging environment throughout the festive season.”

Mike Watkins, head of retailer and business insight at Nielsen, added that with an uncertain economic outlook, retailers had to work hard to encourage customers to keep shopping, and in the run up to Christmas price discounting was deeper and began earlier across both food and non-food channels.

“There was also unprecedented levels of vouchering in December across many supermarkets to encourage shoppers to spend, and this competitive retail environment kept increases in shop prices low,” he continued.

“Retailers know that customers are worried about their personal finances, so they will continue to do all they can to limit price rises over the next few months despite the external pressures.”

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