British Retail Consortium: Shop prices in June edged closer to ending a four-year deflationary trend

London, 2017-Jul-05 — /EPR Retail News/ —

BRC – NIELSEN SHOP PRICE INDEX – JUNE 2017

Period Covered: 05 — 09 June 2017

  • Overall shop price deflation was 0.3 per cent in June, a slight deceleration from the 0.4 per cent fall in May. This is the shallowest deflation rate since November 2013.
  • The deflation of non-food products was 1.4 per cent, comparable to May’s deflation of 1.5 per cent and April’s of 1.4 per cent.
  • Food prices increased on average by 1.4 per cent in June, a similar pace to the 1.4 per cent May increase and the highest since January 2014.
  • Fresh food prices seem to be on an upward trajectory, recording a 1.4 per cent increase in June, 0.2 percentage points higher than in May. This is the highest increase since February 2014.
  • Ambient food inflation stood at 1.5 per cent in June, a slowdown from the 1.8% increase in May.

Helen Dickinson OBE, Chief Executive, British Retail Consortium:

“Shop prices in June edged closer to ending a four-year deflationary trend, as feed-through from the depreciation of the pound and rising commodity prices continues.

“The fact that the headline number, -0.3 per cent, shows that prices are still down on last year should not be misunderstood. The year on year numbers belie the fact that prices have been heading upwards for the last six months; it’s just that significant deflation in the second half of 2016 means there has been considerable ground to make up in the year on year figures.

“Although heading upwards, the speed of price increases was checked in June. Food price inflation was steady on last month, albeit in firmly positive territory; whilst varied performances in the non-food categories netted out to a slight reduction in deflation.

“The steadying of inflation in June is likely a brief hiatus; resulting from the interplay of short term influences on pricing, such as good weather delaying mid-season promotions into June and the longer term competitive pressures constraining the pass through of all costs. We expect shop price inflation to continue trending upwards in coming months.

“The reality is that cost pressures faced by retailers continue to mount. These pressures arise both from market driven increases in the underlying cost of goods and as a result of Government policies. There is a limit to the ability of retailers to protect consumers by absorbing these impacts into their margins, as a result further price increases are inevitable. With that in mind and with the UK’s trading relationships under discussion, it’s of the utmost importance that the Government does all it can to limit any further cost increases that could further adversely impact the finances of the UK’s consumers.”

Mike Watkins, Head of Retailer and Business Insight, Nielsen:

“With inflation rising in essential goods and services, many households are now seeing their monthly household expenditure come under pressure.  Whilst this may add to the uncertainty around discretionary spending, the good news is that shop prices are increasing at a slower rate. Shoppers are also able to find further savings in retail with low price strategies across the grocery sector and competition across the marketplace keeping prices as low as possible.“

Contact:
BRC Press Office
TELEPHONE: + 44 (0) 20 7854 8924
EMAIL: media@brc.org.uk
OUT OF HOURS: +44 (0) 7557 747 269

Source: BRC

BRC-NIELSEN: Shop prices fell by 2.1% in November from a 1.8% decline in October

  • Overall shop prices reported deflation of 2.1% in November from a 1.8% decline in October, a joint record low.
  • Food reported annual deflation of 0.3% from a 0.4% fall in October.
  • On a 12-month average basis, the Shop Price Index reported deflation of 1.7%.
  • Non-food deflation decelerated to 3.3% from 2.7% in October.

LONDON, 2015-12-4 — /EPR Retail News/ — BRC Chief Executive, Helen Dickinson, said: “Shop prices fell by 2.1% last month as a result of retailers continuing to invest in price, intense competition in the run up to Black Friday and lower commodity prices, marking a joint record low for falling prices (with March 2015).

“November also marked the 31st consecutive month of deflation and the 32nd consecutive month of non-food price drops. Non-food prices saw a remarkable 3.3% drop, driven largely by reductions in clothing, footwear, electricals, DIY, gardening and hardware prices. Although the survey period does not cover Black Friday, it is likely that some retailers were discounting early in November in order to spread consumer spending over a longer period. Electricals for instance saw prices down 4.3% on last year.

“Food prices fell by 0.3% as the impact of past falls in oil, weaker demand in emerging markets and a strong pound, helped support a continued deflationary environment. Lower commodity prices will help food retailers to continue to offer the best possible prices. Coffee, lean hogs, soybean, and cattle feeder all demonstrated double digit declines in the 12 months to the end of our survey period.

“This trading environment should be considered with the impact of the industry’s regulatory burden. BRC analysis shows that the combined cost of policy announcements since the General Election adds up to approximately £14 billion over the next five years. The industry will continue to make the case to government, which has extended its review of business rates to early 2016, to properly look at rebalancing this tax away from property intensive industries in order to ensure that the introduction of the living wage does not have unintended consequences on our local communities and jobs .”

Mike Watkins, Head of Retailer and Business Insight, Nielsen, said: “For best part of two years we have had shop price deflation which has helped overall consumer spend remain buoyant, and with consumer confidence back to an all-time high, shoppers are now feeling more optimistic about spending. Falling prices across the High Street and food retailers in November will be another welcome boost for shoppers as they plan their Christmas spending.”

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

SOURCE: British Retail Consortium

BRC Helen Dickinson on BRC-NIELSEN AUGUST 2015 SHOP PRICE INDEX: Shop prices fell by 1.4 as a result of intense competition and falling commodity prices

  • Overall shop prices reported deflation of 1.4% in August unchanged from July.
  • Food reported annual inflation of 0.2%, up marginally from the 0.1% rise in July 2015.
  • On a 12-month average basis, the Shop Price Index reported deflation of 1.7%.
  • Non-food deflation accelerated further to 2.4% from 2.3% in July.

LONDON, 2015-9-11 — /EPR Retail News/ — BRC Director General, Helen Dickinson, said:”Shop prices fell by 1.4 this month as a result of intense competition and falling commodity prices, which is good news for consumers who have seen 28 consecutive months of prices drops.

“Annual food prices rose for a second month but once again the rise was marginal, by just 0.2% year-on-year, and is likely to be a temporary fluctuation in a longer term downward trend driven by ongoing competition.

“August marked the 29th month of falling non-food prices. Clothing retailers discounted heavily in an attempt to shift stock with prices falling on average by 5.4 per cent. Furniture and Flooring saw a sharp deceleration in deflation to 1.2%. Great deals could be found in Books, Stationery and Home Entertainment. Prices throughout this category fell on average by 5.2 per cent.

“The latest CPI rate turned positive, after hovering around zero for the last six months. Although this inflation rate – which includes services, utilities, leisure and petrol – could fall back again, partly due to the drop in the price of oil, which has slumped by nearly a quarter in the past two months.”

“A relatively benign economic environment and a fiercely competitive market will see retailers continue to respond to their customers with prices and promotions to maintain market share.”

Mike Watkins, Head of Retailer and Business Insight, Nielsen, said: “Consumer confidence continues to increase but many shoppers are still unable or unwilling to spend freely, so retailers are continuing to offer high levels of promotions and price cuts. The underlying trend is for price deflation across both food and non-food retail and with shoppers now back from summer holidays we can expect some good deals and attractive pricing for shoppers over the next few weeks.”

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

 

BRC-NIELSEN SHOP PRICE INDEX: Shop prices fell by -1.3 per cent in June 2015; 26th consecutive month of prices drops

– Overall shop prices reported deflation of 1.3% in June up from 1.9% in May.

– Food reported annual deflation of 0.4% the lowest deflation rate since February 2015.

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

– Non-food deflation slowed to 1.9% in June from 2.5% in May.

LONDON, 2015-7-8 — /EPR Retail News/ — BRC Director General, Helen Dickinson, said: “Shop prices fell by -1.3 per cent this month marking the 26th consecutive month of prices drops. This is a slight slowdown in falling prices when compared with recent months.

“Consumer confidence hit a 15 year high which suggests that shoppers will feel more comfortable about buying major purchases. It also suggests that consumer spending, one of the main drivers of the recovery, should remain robust over the summer.

“While non-food prices fell at a slower rate this month (-1.9 per cent against -2.5 per cent in May), June marked the 27th month of non-food deflation. Shoppers wishing to invest in their home won’t be disappointed with great deals to be found in furniture and flooring and gardening and hardware in particular.

“Food has been deflationary throughout 2015 but the pace slowed in June, largely as the result of the rebound of oil prices in recent months.

“We’re seeing a strong appetite for consumer credit, inflation remains at an historic low, unemployment continues to fall and wages have started to rise, the wider macro-economic data continues to be supportive for the consumer.”

Mike Watkins, Head of Retailer and Business Insight, Nielsen, said: “Retailers continue to use price cuts and promotions to stimulate sales which is helping to maintain shop price deflation, and we see little evidence to suggest that prices will rise in the near future. With many food retailers still using price cuts to attract new shoppers, this is lowering the cost of the weekly shop and so the overall CPI figure in the UK. Deflation and price led competition will continue to be a key driver of sales growth for some time yet”

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

 

BRC-NIELSEN SHOP PRICE INDEX JANUARY 2015: Overall shop prices reported deflation for the 21st consecutive month

LONDON, 2015-2-4 — /EPR Retail News/ — Overall shop prices reported deflation for the 21st consecutive month, decelerating to 1.3% in January, after reporting deflation of 1.7% in December.

Food reported annual deflation of 0.5% in January after reporting inflation of 0.1% in December.

On a 12 month average basis, the Shop Price Index reported deflation of 1.6%.

Non-food deflation slowed to 1.8% in January from 2.8% in December.

BRC Director General, Helen Dickinson, said: “For twenty-one consecutive months prices in Britain’s shops have fallen, this month by -1.3 per cent. It’s the second time in three months that we’ve seen food prices fall, accelerating to their lowest levels on record”.

“Clearly customers were taking advantage of the January sales with good bargains for furniture, flooring and electricals resulting in plenty of stock shifting.

“There is some evidence that the heavy discounting in early December resulted in some retailers pulling their new season stock forward, which meant a significant amount of goods were sold at full price in January.

“The halving of the oil price since the summer has helped the retail supply chains with the impact of these falls, continuing to make their way through to shop prices.

“With the outlook for inflation low, the jobs market robust and rising real incomes gathering pace, the outlook for consumer spending looks positive. Deflation doesn’t always translate into bad news for retailers. The Producers Price Index (which tracks the cost of raw materials to producers) remains deflationary, so retail businesses will continue to see decreases in their own input costs for the foreseeable future. To remain competitive, retailers will continue passing these savings on to the consumer.

“2015 is shaping up to be win-win year for shoppers and retailers alike.”

Mike Watkins, Head of Retailer and Business Insight, Nielsen, said: “Over the last six months we have seen food inflation falling and as we start 2015, we now have food deflation. Whilst falling prices are of course welcomed by shoppers, the impact is that there is only marginal value sales growth across the industry. With further price cutting expected by the major Supermarkets the near term outlook is for the continuation of a low growth trading environment. Deflation also continues in clothing and electrical with non-food retailers still able to pass on the benefit of falling supply chain costs to the consumer.”

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