Published on January 4th, 2019 | by The GC Team0
Shop prices rise, despite seasonal discounting
New figures released today show that December’s shop price inflation accelerated to 0.3% year-on-year, up from 0.1% in November.
The figure was the highest since April 2013 and was driven by a slowdown in deflation across non-food, which dropped to 0.4% from 0.8% the previous month, and an increase in the cost of ambient food, with prices up 2.3% in December from 2.1% in November.
Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said the figures only serve to underline how tough conditions are in the retail industry.
“Despite non-food goods being cheaper on average than last year, early indications suggest that retailers faced a challenging environment throughout the festive season,” she commented.
“Shoppers may have become accustomed to great value, but Brexit uncertainty means that a continuation of the low prices is by no means guaranteed. Without a trade deal with the EU, the cost of importing many of the goods we buy day-to-day will go up significantly and retailers simply do not have the room in their margins to protect consumers from those costs.”
Mike Watkins, Head of Retailer and Business Insight at Nielsen, said retailers had to work hard to encourage customers to keep shopping. Hence, price discounting was deeper and began earlier across both food and non-food channels in the run up to Christmas and there were also unprecedented levels of vouchering across many supermarkets.
Acknowledging that previous years have been “tough enough”, Andy Soloman, CEO of customer experience firm Yomdel, said the nation’s bricks and mortar outlets now face a wider spectrum of issues for the year ahead.
“Not only does the changing face of retail mean they need to continue to pivot in order to remain relevant against the growing tide of online shopping, but the possibility of no EU trade deal could see our imports become far more expensive.
“This could be disastrous for the UK retail sector, one that is already struggling to keep its head above water, and we need to look beyond discounting, vouchering and limiting price rises to adopt more sustainable growth strategies for the year ahead.”