BRC-Nielsen Shop Price Index for January shows deepest level of food deflation on record
Shop prices fell for a 21st consecutive month in January as food prices saw a record drop.
Figures released by the British Retail Consortium and Nielsen in their monthly index show that shop prices fell by 1.3% overall in January, after declining by 1.7% in December.
Food prices dropped by 0.5% in January which was the steepest fall since the BRC and Nielsen began compiling their records in 2006.
Meanwhile, non-food deflation slowed to 1.8% in January from 2.8% in December.
The BRC said that shoppers had taken advantage good bargains for furniture, flooring and electricals in the January sales which had resulted in plenty of stock shifting.
BRC Director General, Helen Dickinson, said: “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.”
Dickinson said that deflation did not always translate into bad news for retailers. She added: “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.”