Price tumble of 2% hailed as ‘good fortune’ for shoppers
- Credit: PA
Prices in Britain’s shops continued to tumble in December in an “incredible run of good fortune” for shoppers, figures show.
Overall shop prices reported deflation of 2% last month, down from the 2.1% decline in November, according to the BRC-Nielsen Shop Price Index.
Shoppers have now been able to fill their baskets and pay less for their goods than the year before for the last two years and eight months.
British Retail Consortium chief executive Helen Dickinson said: “This is an incredible run of good fortune for shoppers who’ve been preoccupied with picking up presents for family and friends, as well as themselves ahead of the holiday season.
“With retailers continuing to invest in price, relatively low commodity prices and intense competition a hallmark of the industry, we can expect falling prices to continue in the medium term.”
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Food reported annual deflation of 0.3%, unchanged from November’s rate, while non-food deflation decelerated to 3% from 3.3% in November, driven largely by reductions in clothing, footwear, electricals, DIY, gardening and hardware prices.
A number of key commodities in the retail supply chain, particularly oil, have fallen dramatically recently, and the impact of this will continue to make its way through to shop prices for some time, the BRC said.
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Ms Dickinson added: “Although trading statements are starting to filter through, we will have to wait until next week to learn if the lower priced goods have translated into positive sales for the market as a whole during the all-important Christmas trading period.”
Mike Watkins, head of retailer and business insight at Nielsen, said: “We can expect the current levels of deflation across the retail industry to continue for the first half of 2016.
“There is little upward inflationary momentum from global commodity or oil prices and locally, the price war in food retailing looks set to continue.
“After the unseasonably mild autumn and early winter, many non-food retailers will use price cuts and targeted promotions early in the year, to help sell through and to benefit from any rise in real wages.”