Retailers ramp up festive discounting amid ‘extremely challenging year’
Prices in shops are tumbling in the run-up to Christmas amid the crisis on Britain’s high streets, which has left retailers in a precarious financial position, a report has said.
Those selling fashion and DIY products are particularly likely to have discounted their goods, it found.
Prices fell by 1.8% in November compared with a year earlier, marking a sharper decline than a 1.2% drop seen in October, according to the BRC (British Retail Consortium)-Nielsen shop price index.
November’s decline was driven by non-food prices, which fell by 3.7%, after a 2.7% fall was recorded in October.
By contrast, food prices were 1.3% higher in November than a year earlier.
Fears for the future of the high street and jobs have escalated this week amid announcements relating to Arcadia and Debenhams.
Helen Dickinson, chief executive BRC, said: “It has been an extremely challenging year with two prolonged periods of forced closures for parts of the industry.
“Those shuttered during lockdown have lost billions in sales and many are now in a precarious financial position.
“The Government must not subject these businesses to a return to full business rates liability from April 2021, and they must urgently consider extending the moratorium on debt enforcement beyond January.
“Without such interventions, we will see countless more store closures and job losses, deepening the crisis on our high streets.”
Mike Watkins, head of retailer and business insight, Nielsen, said: “Shop price inflation remains low in food, with supermarkets competing for the wallet of the Christmas shopper when sales of seasonal food and drink increased at the end of November.”
A separate report from the British Independent Retailers Association and Starling Bank has found two-thirds (66%) of people plan to buy gifts from independent shops in the run-up to Christmas.
When asked why they would opt to buy locally this year, 43% want to support independent businesses and the community due to the impact of the pandemic.
A similar proportion (42%) want an original gift selection, while 25% feel local independent shops are more convenient.
Of those choosing to shop with independent businesses, the average person will spend about £119 on gifts.
Food and beverages are the most popular items to buy from independent shops, followed by homeware, clothing and jewellery, the survey found.