Non-food shop prices for the first week of January have signalled “reassuring” signs of recovery, despite ongoing deflation driven by the Sales.
According to the British Retail Consortium (BRC)-Nielsen shop price index, non-food shop prices were 1.9% lower than last year in the six days to 8 January.
Shop prices have seen year-on-year deflation for 57 consecutive months.
Helen Dickinson, chief executive at the British Retail Consortium (BRC), noted it was the ”same story of divergent price movements for food versus non-food categories from previous months, albeit with non-food prices creeping ever so slightly towards inflation”.
“There are reassuring signs for consumers from the fall in latest input price inflation, that the worst effects of sterling’s depreciation have now passed,” she added.
“Meanwhile, even at a slowing rate, inflation continues to outpace wage growth in the UK, the effects of which we saw play out in lacklustre festive sales. With this in mind, it was reassuring to get clarity from the Brexit Secretary last week on a transition period that will allow trading conditions to continue from March 2019, thereby maintaining the choice and availability of affordable, quality products for consumers.”
Mike Watkins, head of retailer and business insight at Nielsen, added: “With consumer’s willingness to spend weakened by the return of inflation and shopper sentiment more fragile than a year ago, retailers are continuing to hold back on price increases.
“The good news is that price increases across supermarkets are beginning to slow and some non-food retailers are also using short-term promotions and offers to encourage shoppers back into store to kickstart demand. Shoppers will continue to look for savings over the next few months as increases to household bills start to hit home and we expect shop price inflation to remain less than CPI (the consumer price index).”