BRC – NIELSEN SHOP PRICE INDEX – NOVEMBER 2016

Period Covered: 07 – 11 November 2016

  • Overall shop prices reported deflation of 1.7% in November, unchanged from the previous month.
  • Non-food deflation accelerated to 2.3% after falling 2.1% in the previous two months. This is deeper than the 3-month average of -2.2%.
  • Food deflation decelerated sharply to 0.8% in November from the 1.2% fall in October
  • Fresh Food deflation decelerated to 1.2% from the 2.0% fall in October while Ambient Food decelerated in November to -0.1%.

 

Helen Dickinson OBE, Chief Executive, British Retail Consortium:

“November took the run of shop price deflation into its 43rd month, with prices falling by 1.7 per cent year-on-year, an unchanged rate of deflation from October. While food deflation slowed to 0.8 per cent year-on-year compared with 1.2 per cent in October, non-food deflation increased to 2.3 per cent from 2.1 per cent, which could be attributed to extended promotions in the run-up to Black Friday. The discrepancy between fresh and ambient food deflation continues. The rate of decline in fresh food eased to 1.2 per cent from 2.0 per cent in October, while deflation in ambient was almost unchanged at 0.1 per cent.

“These figures once again point to retailers’ effectiveness in controlling the inflationary pressure that continues to build through the devaluation of the pound. We have still yet to see any visible impact from the weaker pound on shop prices, but we do expect to see a gradual slowing of the rate of deflation. Increasingly value-driven and informed customers mean retailers will have to remain highly competitive. So while we may start to see cost pressures beginning to feed through into prices next year, we don’t expect any sudden spikes or surges, and the timing and extent of increases will differ from one category and retailer to the next.”

Mike Watkins, Head of Retailer and Business Insight, Nielsen:

"Shop prices are still falling and deflation will continue to at least the end of the year, as the result of the battle for the wallet of Christmas shoppers. Looking ahead, we can expect a slow return to shop price inflation during 2017 with fresh foods, some of which are also seasonal and weather dependent, likely to be impacted sooner when increased supply chain costs finally begin to filter through to retail prices. However, retailers will keep running promotions and campaigns to encourage retail spend and this will continue to help shoppers to save money next year."