Fashion and DIY drive shop price deflation

Shop prices fell by 1.8 per cent in November, according to the latest the British Retail Consortium-Nielsen shop price index.

The decline in prices last month was driven by non-food products, which reduced in price by 3.7 per cent after a 2.7 per cent fall was recorded in October.

Helen Dickinson, chief executive of the British Retail Consortium, said: “As we approach Christmas, consumers will be glad to see another month of falling prices. This was mainly driven by non-food products, where prices have fallen at a much quicker rate than the previous month.

“Where demand was weak for some products, discounting has followed, with many retailers trying to encourage more consumer spending - particularly those selling fashion and DIY goods.”

She added: “While food inflation remains low, we anticipate upward pressures on food prices once the UK-EU transition period ends.”

Mike Watkins, head of retailer and business insight at Nielsen, said: “Shop price inflation remains low in food with supermarkets competing for the wallet of the Christmas shopper when sales of seasonal food and drink increased at the end of November.

“However, for non-food retailers, the industry faced the challenges of further lockdowns and predicting the levels of demand for online, so it's not a surprise to see price deflation accelerate considering the uncertainty around consumer sentiment.”

On help for retail after Christmas and Brexit, the BRC's Dickinson said: “Those shuttered during lockdown have lost billions in sales and many are now in a precarious financial position. The government must not subject these businesses to a return to full business rates liability from April 2021, and they must urgently consider extending the moratorium on debt enforcement beyond January.

“Without such interventions, we will see countless more store closures and job losses, deepening the crisis on our High Street.”

Elle Nadal, director of marketing for EMEA at customer experience platform vendor Iterable, said of the market right now: “It is important to remember that discounted prices are not the only way to engage with customers this holiday period. The gold standard will be a cohesive customer experience which spans across all digital channels, as well as in-store.

“We expect brands will continue to maximise sales via online channels, offering customers unique deals and a more flexible way to browse - perfectly complementing the in-person shopping experience.”

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