Shop price inflation slows in February
Shop price inflation in the UK fell to 1.2% in February as clothing, electrical and furniture retailers cut prices to drum up trade from consumers.
The BRC-Nielsen shop price index for February 2012 shows that retail prices rose 1.2% from a year earlier following a 1.4% gain in January. Non-food prices fell 0.7%, the first decline since November 2009, while food inflation increased to 4.2% in the month from 3.7% in January.
Commenting on the figures Stephen Robertson, British Retail Consortium director general, said: “Clothing, electricals and furniture are all cheaper than at this time in 2011 as retailers respond to the squeeze on personal finances by cutting prices, reducing their own underlying profitability. Non-food as a whole showed annual deflation for the first time since November 2009, contributing to the lowest overall shop price inflation for nearly two years.
“Increased transport costs have edged food inflation up slightly while money-off-your-overall-bill promotions are good for customers but not reflected in shelf prices.”
Never Miss a Retail Update!Mike Watkins, senior manager, retailer services at Nielsen added: “Promotional activity has been sustained over the last three months as consumer confidence remains fragile. Households are coping with falling disposable income as fuel and energy costs are still rising so retailers are having to work hard to encourage customers to spend.
“The recent rise in oil prices and past rises in commodity prices had an impact on food inflation but non-food shop prices are falling, which reflects consumers’ unwillingness to spend as well as the year-ago increase in VAT coming out of the comparatives.”
The BRC said the figures showed that there was even less justification for the planned 5.6% business rates rise in April.
