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Published on January 5th, 2018 | by The GC Team

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December discounting drives down shop prices

According to the BRC-Nielsen Shop Price Index, shop prices fell further into deflation in December, with non-food prices falling at their fastest rate since the beginning of the year – 2.1% down year-on-year compared to a 1.1% drop in November.

While the overall price decline in December was 0.6% compared to last year, food prices were actually up by 1.8% in December, and it was non-food that drove deflation as retailers went for heavy pre-Christmas discounting to stimulate sales.

 Helen Dickinson OBE, Chief Executive, British Retail Consortium (pictured), commented: “After several months of shop prices teetering on the edge of inflation, December saw them retreat deeper into deflationary territory. Prices in December fell at the fastest rate since March this year when only last month we saw the shallowest rate of deflation for four years.

“Retailers offered lower prices at the beginning of December than last year on many of their non-food ranges, providing welcome options for Christmas shoppers on a stretched budget. These discounts allowed consumers some much needed breathing room during the festive period at a time when the cost of their food shop is on the rise.”

Mike Watkins, Head of Retailer and Business Insight, Nielsen, added: “The SPI inflation rate is below other inflationary measures, showing there is little inflationary pressure coming from retailers. With consumer confidence wavering and unpredictable levels of demand, many non-food retailers have been keeping prices low to stimulate spending, which will undoubtedly have come at a cost to margins.”

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