Period Covered: 01 – 05 February 2021

• Shop Prices fell in February by 2.4%, below January’s decrease of 2.2%. This is the lowest deflation rate since May 2020. This is below the 12- and 6-month average price decreases of 1.7% and 1.8%, respectively. 

Helen Dickinson OBE, Chief Executive, British Retail Consortium:
“Prices in February fell, driven by a drop in non-food prices. With the third lockdown constricting consumer spending across all income brackets, many retailers have been vigorously discounting products in an attempt to encourage additional spending. Meanwhile, despite Brexit-related costs, food inflation remained steady thanks to fierce competition between grocers to maintain their market share amidst declining incomes for some UK households.

“However, consumers could face higher prices in the future as a result of rising global food prices, shipping costs, and Brexit red tape. Many retailers are already under great financial strain due to ongoing forced closures and restrictions, and some will not be in a position to continue to absorb all of these added costs. It is vital Government uses the Budget today to ease cost pressures on retailers by extending targeted business rates relief for the worst-hit businesses, extending the moratorium on aggressive debt enforcement and lifting the EU state aid limits on lockdown grants. Otherwise, retailers will struggle to continue to provide the competitive prices their customers are used to.”

Mike Watkins, Head of Retailer and Business Insight, Nielsen:
"With the national lockdown continuing, prices across fashion and clothing retailers continue to fall ahead of the anticipated re-opening of stores in April. However for Grocery retailers despite basket spends growing by over 25% and volume sales up 4% since the start of the year, more shoppers are looking to stretch their budget and price led competition is keeping a lid on increases in food prices.”