Shop prices in December fell 0.6% on last year compared to a 0.1% decline in November, according to the latest BRC – Nielsen Shop Price Index. This represents the deepest price deflation since March 2017.
The Index measured changes in the prices of the 500 most commonly bought items for the period December 4 to 8, 2017.
It found that non-food prices fell at their fastest rate since January 2017, declining 2.1% year on year compared to 1.1% in November.
The drop was offset by an increase in food inflation, which continues to gain momentum on the back of climbing global food prices earlier in the year. It rose to 1.8% in December, up from 1.5% in November. Fresh food inflation increased to 2.0%, a significant jump on November’s 1.3% rate. Ambient food inflation continued at similar pace as last month: prices increased by 1.7% year-on-year in December, slightly down from the 1.8% recorded in November.
“While retailers will continue to do their best to absorb cost increases for their customers, the challenges to the industry remain stark with more inflationary pressures in the pipeline,” said Helen Dickinson, Chief Executive, British Retail Consortium.
“Therefore, this year we will continue to press the Government for clarity on the principles and terms around the Brexit transitional arrangements, to ensure businesses have the certainty to plan and invest and that consumers don’t face higher costs or delays from tariffs or onerous customs barriers.”