Shop prices saw the deepest deflation since March 2017 in December, falling 0.6 per cent on last year compared to the 0.1 per cent decline in November.
According to the British Retail Consortium / Nielsen Shop Price Index, non-food prices declined at their fastest rate since January 2017, dropping 2.1 per cent year on year compared to 1.1 per cent in November.
Helen Dickinson, Chief Executive of the British Retail Consortium, says: “After several months of shop prices teetering on the edge of inflation, December saw them retreat deeper into deflationary territory.
“Food inflation picked-up pace this month, fuelled by climbing global food prices earlier in the year. 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”.
Mike Watkins, Head of Retailer and Business Insight at Nielsen, adds: “With consumer confidence wavering and unpredictable levels of demand, many non-food retailers have been keeping prices low to stimulate spending, which will undoubtedly have come at a cost to margins.
“Whilst food prices have edged up a little due to supply chain increases in fresh and seasonal foods, pricing across Supermarkets will remain competitive as we start 2018 with consumers still coping with higher household bills.”
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