Shop prices continued to fall in October, but experts predict they will begin to rise during the first half of 2017 as retailers seek to offset increased costs due to the weakness of the pound.
Non-food shop prices fell 2.1% in October compared to the same month last year, as retailers ran promotions to encourage shoppers into stores, the British Retail Consortium (BRC) and Nielsen Shop Price Index found. This was flat with the rate in September.
Overall shop prices, including food, were down 1.7% in October.
However, BRC chief executive Helen Dickinson said this trend was expected to reverse next year: “While we know that the devaluation of sterling since the Brexit vote is stoking inflationary pressures, the good news for consumers is that retailers have been successful in managing this to date and there is still no impact visible in shop prices.”
“However, it is inevitable that imported inflation will begin to make its mark and we would expect to start to see this effect coming through in the first quarter of 2017.”
Next, John Lewis and Fat Face have already warned they will have to increase prices next year, as they are facing higher import costs as a result of the fall in the value of sterling.