Retail prices slide lower amid post-Christmas sales and store closures
Retail prices have plunged further this month as post-Christmas sales and shop closures caused retailers to discount stock heavily, according to new figures.
The BRC-Nielsen Shop Price Index for January has revealed that prices slid by 2.2%, as deflation accelerated from 1.8% in December.
The slump was driven by a sharp decline in the price of non-food items during the month. Non-food prices slid by 3.6% in January, compared with a 3.2% fall in the previous month.
British Retail Consortium CEO Helen Dickinson said: “The January blues may have been slightly eased for many consumers thanks to ongoing falling prices this month.
“Post-Christmas sales and the national lockdown drove non-food prices down – especially for clothing and DIY goods.”
Dickinson said food prices also rose at their slowest for four years as supermarkets fiercely compete to offer the best value to hard-up customers.
Food inflation eased to 0.2% in January, falling from 0.4% growth in December as the Big Four supermarkets continue to put pressure on prices to compete with German discounters Aldi and Lidl.
Fresh food prices fell for the second consecutive month, sliding by 0.8%, while ambient food prices rose by 1.7%, after they slowed from 2.3% growth in December.
Mike Watkins, head of retailer and business insight at Nielsen, said: “January is always a difficult month for retailers after the increased spending over Christmas and New Year and the impact of the return of lockdown has been further price deflation in non-food, as retailers keep prices low to encourage shoppers to spend online.
“Food retailers remain locked in a battle for market share and continue to cut prices and food price inflation is lower than this time last year.
“Looking ahead, we can expect some turbulence in shop prices as the industry navigates through the impact of the EU trade deal, the increasing pressure on disposable incomes, and the uncertainty of when non-essential retail can fully reopen.”