BRITISH RETAIL CONSORTIUM: Overall shop prices reported deflation of 1.0% in February

  • Overall shop prices reported deflation of 1.0% in February, a sharp deceleration from the 1.7% fall in January.
  • Non-food deflation decelerated to 1.8% in February, an easing from the 2.3% decline in the previous month.
  • Food reported inflation of 0.4% in February, a sharp acceleration from the 0.8% fall in January. This is the first inflationary rise since April 2016.
  • Fresh Food reported a marginal inflation rate in February, up 0.1% from the 1.2% fall in each of the previous three months.
  • Ambient Food reported annual inflation for the second time in three months, rising 0.8% in February from the 0.2% decline in January.

London, 2017-Mar-06 — /EPR Retail News/ — HELEN DICKINSON OBE, CHIEF EXECUTIVE, BRITISH RETAIL CONSORTIUM:

“Shop prices in February were 1 per cent lower than the same month last year, continuing a trend of year-on-year price falls that has lasted nearly four years.

“However, it is clear that the significant underlying cost pressures, which have been building over the last year are beginning to filter through into shop prices. Global food prices were on average 16 per cent higher at the beginning of this year compared to last, whilst over the same period the value of the pound fell around 15 per cent. Despite this, February saw an increase of just 0.4 per cent in the prices of food sold in shops; proving retailers’ resilience in managing to largely shield consumers from cost increases.“For the time being, consumers continue to benefit from an annual fall in non-food prices, which were down 1.8 per cent on the previous year. However, the rate of deflation has eased considerably from a monthly perspective, which can be explained in part by an end to the promotional activity in January, after a weak festive sales performance in some non- food categories.

“Looking further ahead, retailers, who operate in a highly competitive market with narrow margins, will be increasingly hard pushed to protect their customers from the inevitable impact of these rising cost pressures. We can therefore expect this impact to start manifesting in shop prices over the course of the year.”

MIKE WATKINS, HEAD OF RETAILER AND BUSINESS INSIGHT, NIELSEN:

“Whilst food inflation has returned, the competition between retailers means that price increases passed onto consumers in February were relatively small, and there were also some seasonal and weather related increases. Non-food prices remain deflationary and in part this reflects the structural change underway in non-food retailing. At the moment consumer sentiment around spending intentions is strong so we don’t anticipate any significant change on retail spend over the next few months even if shop price inflation gains more momentum.”

Contact:
BRC Press Office
TELEPHONE: + 44 (0) 20 7854 8924
EMAIL: media@brc.org.uk

Source: BRC

BRC – NIELSEN SHOP PRICE INDEX: Overall shop prices reported deflation of 2.0% in August, from the 1.6% decline in July

LONDON, 2016-Sep-06 — /EPR Retail News/ — Helen Dickinson OBE, Chief Executive, British Retail Consortium. “Shop prices continued their record run in deflationary territory. Lower prices this August compared to last were driven by a combination of continuing promotional activity, softening oil prices and a global supply glut of wheat weighing on food prices.

“The devaluation of sterling in wake of the referendum will put upward pressure on shop prices. But that’s likely to take several months to properly feed through, given that retailers won’t feel the brunt of the cost increases until existing contracts with foreign suppliers come to an end. Even then, retailers will have to make a decision about when and how much to pass onto consumers. Given the strength of competition in the market, and if the economy softens in line with predictions, any pass through may be more limited than implied by the exchange rate movement. As far as they can, retailers will endeavour to mitigate impacts by looking for productivity gains in their own businesses, rather than compromising on the value they are offering to consumers.”

Mike Watkins, Head of Retailer and Business Insight, Nielsen
“Lower prices than a year ago across most channels with further price cuts by Supermarkets has been good news for shoppers and helped to keep consumer spend buoyant over the summer. Competition for discretionary spend is likely to intensify as we head towards the end of the year, so retailers will be keen to keep prices low and promotions sharp.”

For Media Enquiries:
British Retail Consortium
Tel:  0207 854 8924
Email:  zoe.maddison@brc.org.uk

Source: British Retail Consortium

BRC-NIELSEN SHOP PRICE INDEX MARCH 2015: Overall shop prices reported deflation for the 23rd consecutive month, accelerating to 2.1% in March, from 1.7% in February

LONDON, 2015-4-9 — /EPR Retail News/ — Overall shop prices reported deflation for the 23rd consecutive month, accelerating to 2.1% in March, from 1.7% in February.

Food reported annual deflation of 0.9% in March from a 0.4% fall in February.

On a 12-month average basis, the Shop Price Index reported deflation of 1.7%.

Non-food deflation accelerated to 2.8% in March from 2.5% in February.

BRC Director General, Helen Dickinson, said: “Prices in Britain’s shops reached another new low, this month by -2.1 per cent. That’s the deepest deflation rate since our records began in December 2006.

“Food prices saw a further drop, largely as a result of promotions for fresh food, whilst non-food prices fell at a faster rate than last month, hitting a twenty-fourth consecutive month of deflation.

“Clothing and electricals continue to outshine by offering consumers eye-catching bargains. In fact, there’s evidence of plenty of promotions and price-cuts in non-food items which should help drive up sales at a time when retailers are turning their attention to the Summer ranges.

“Both retailers and consumers will cheer on a hat-trick of good economic news. The Consumer price index (CPI) has fallen to zero for the first time on record, boosting incomes in real terms and bringing the UK to the brink of a spell of deflation that is expected in the coming months. That fall is largely the result of a deep oil price slump (down 49 per cent on a year ago) and the continuing fierce competition among supermarkets who’ve dropped fuel and food prices over the year.

“Consumer confidence has also soared to a near 13-year high. Retailers will have been hoping that this translated into shoppers being prepared to splash their cash over the long Easter weekend.

“With strong consumer confidence and relatively benign macro-economic conditions we can expect the nation to respond with their feet or with a mouse click in the coming weeks.”

Mike Watkins, Head of Retailer and Business Insight, Nielsen, said: “Prices continue to fall across the retail industry and deflation is likely to be with us for the near future, which means shoppers are going to be able to stretch their budgets further when shopping in store or online.

“The implication for food retailers is that this may help sustain the slowly improving sales volumes we have seen in recent weeks, and also encourage consumers to spend some of their savings on affordable indulgences. For many high street fashion, home and outdoor retailers, lower prices are being backed up by attractive promotions which comes at good time as momentum builds in selling late Spring and early Summer ranges.”

British Retail Consortium, 21 Dartmouth Street, Westminster, London, SW1H 9BP.
020 7854 8900. info@brc.org.uk.