Shop prices continue to slide

Consumers have seen the fifth consecutive month of falling shop prices as struggling retailers deepen their discounting to stimulate sales, figures show.

Overall prices were down 0.4% on this time last year, with non-food prices falling by 1.5%, well below the 12-month average decline of 0.7%, according to the BRC-Nielsen Shop Price Index.

While food inflation accelerated to 1.6% from 1.1% in September, it was still slightly below the 12-month average price increase of 1.7%.

Source: British Retail Consortium
Source: British Retail Consortium

British Retail Consortium chief executive Helen Dickinson said: “Non-food prices have fallen well below the 12-month average, with greater discounting taking place as retailers seek to stimulate additional sales.

“The year has seen relatively weak sales and retailers hope that Black Friday and Christmas will reverse this trend with the help of lower prices.”

She added: “Rising global food prices and the higher oil prices from earlier this year will increase costs for retailers. These factors come as the industry struggles with the burden of public policy costs, such as business rates, which is weighing heavily on the industry and keeping margins at record lows.

“Furthermore, while the threat of a no-deal Brexit has been pushed back, it has not gone away. To remove this threat, and the price rises that would result, the Government must secure an agreement with the EU as soon as possible to give consumers and retailers the certainty they need.”

Mike Watkins, head of retailer and business insight at Nielsen, said: “With an uncertain economic outlook at the start of the ‘golden quarter’, the industry has been working hard to stimulate demand and to keep price increases as low as possible.

“Seasonal ranges are now in store, and we can expect an increase in promotional activity in the run up to Christmas, which will give shoppers further savings at the checkout.”

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