Shop price inflation declined to its lowest level to 16 months in December as retailers battled to entice cash-strapped consumers, new data has revealed.
According to the latest Shop Price Index from Nielsen and the British Retail Consortium (BRC), overall shop price inflation dipped from two per cent in November to 1.7 per cent last month, although food inflation rose to 4.2 per cent. Non-food inflation was down at 0.3 per cent, a two-year low.
“This is a good bit of New Year news for customers,” said BRC director-general Stephen Robertson. “This is being driven by price cuts in electricals, clothing and footwear, where many items are now cheaper than they were at this time last year.”
Mr Robertson added that retailers “deserve credit” for easing the pressure on shoppers by keeping their prices down. Although he acknowledged that many consumers are likely to rein in their post-Christmas spending, he claimed falling commodity costs would most likely drive inflation lower.
Earlier this week, the BRC-KPMG Retail Sales Monitor showed that the value of last month’s retail sales was up 2.2 per cent on a like-for-like basis from December 2010.
