April marks ‘three-year anniversary’ of falling shop prices
UK shop prices dropped by 1.7% in April which was unchanged from the decline seen in March.
The figures released by the British Retail Consortium and Nielsen in their monthly shop price index show that shop prices have now been in negative territory for the past three years.
Food returned to inflationary territory in April to rise by 0.1% compared with the 0.4% decline in the previous two months.
Meanwhile, non-food deflation accelerated to 2.9% in April from the 2.6% fall in March.
Helen Dickinson, chief executive of the British Retail Consortium, said: “We’ve seen three years of falling shop prices, with prices falling by 1.7% in April compared to a year earlier. The thirty-six consecutive months of price falls is being driven by intense competition across the industry.
“It has knock on implications for margins and profitability given the combination of continued investment in digital and rising cost pressures, compounded by recent policy announcements.
“Ensuring they do not pass on these cost increases, alongside the intensity of competition in the market, are the principal reasons why retailers continue to respond to their customers’ demands for value. As this month’s figures show, this has helped shoppers and kept inflation (and therefore interest rates) low to betterment of the UK economy.”
The fall in non-food prices marked the thirty-seventh month of deflation for the category. The BRC said shoppers could find good bargains in clothing and footwear, electricals and furniture and floorcovering. Clothing and footwear prices saw a significant fall of 7.1%, highlighting the heavy discounting in the run up to the summer season.
