The British Retail Consortium (BRC) has released its latest BRC – Nielsen Shop Price Index
Covering April 2018, the report reveals that shop prices have been deflationary for 60 months now, with April showing the deepest deflation (at 1.0%) since February 2017.
Deflation in non-food prices was deeper in April than in March, with prices decreasing at a rate of 2.2% compared to March, when prices declined by 1.9%.
“Overall, shop prices continued to fall in April, representing the deepest period of deflation since February last year. The upward pressure on prices from the fall in the pound is weakening, leaving underlying commodity prices and strong competition for customers the key influences on inflation,” said Helen Dickinson OBE, Chief Executive, British Retail Consortium.
“Higher global commodity prices than last year pushed food price inflation upwards in April. On the other hand, non-food prices sunk further into deflation as retailers continue to respond to the squeeze on households’ discretionary spending by offering low and falling prices.
“As negotiations on Brexit continue to play out against this backdrop the importance of addressing the issue of frictionless movement of goods across borders is increasing. Retailers must have clarity on this position if they are to continue to provide a wide range of goods for consumers at affordable prices.”
Mike Watkins, Head of Retailer and Business Insight, Nielsen, added: “With weak consumer demand, any success in sales performance is coming at the expense of retailer’s margins, with lower prices in non-food and inflation now hovering around 1% in food stores.
“Recent industry data suggests poor footfall and with unseasonably cool weather punctuated by a brief hot spell, sales momentum has been hard to sustain. So, whilst promotional activity continued after Easter, retailers are still keeping prices competitive to tempt shoppers back into store as consumers not yet feeling better off.”
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