Shop Price Index

Discounts continue ahead of Christmas

Helen Dickinson OBE, Chief Executive, British Retail Consortium: 

"Shop Prices continued to fall in December as receding inflationary pressures, weak consumer demand and intense competition combined to keep price increases at bay. 2019 has been a particularly challenging year, with historically weak sales growth. Food inflation was steady as pressures from the global market trickled down to the consumer, however, at 1.4% it was a modest increase compared to historic inflation rates. As non-food retailers competed for discretionary spend, they have felt the brunt of weak sales. It is no surprise that December non-food prices fell significantly below the 12-month average for the fifth consecutive month as retailers pushed discounts in one last attempt to entice Christmas shoppers.

“While we expect future upward pressures on shop prices from movements in global food prices, these are likely to be relatively modest. The highest risk to prices remains the outcome of Brexit negotiations. With a new year comes a new Government and the opportunity to reduce cost pressures on the retail industry. It is key that the future relationship between the UK and EU secures tariff-free and low-friction trade in order to ensure a fair deal for consumers. Any future deal must maintain choice and availability by keeping costs down.”

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

"The competition for the discretionary spend of shoppers intensified in December and discounts were deeper and began earlier, as retailers had to work even harder to keep customers shopping due to weak consumer demand. The continued deflation in non-food may have helped sales on the high street, however many supermarkets faced with weak volume growths reduced prices in the run up to Christmas to give a short-term boost to sales."


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