By Marcus Leach
Overall shop price inflation fell to 2.0% in November from 2.1% in October. Food inflation fell to 4.0% in November from 4.2% in October. Non-food inflation was unchanged at 0.8% in November.
“At a time when petrol prices and utility bills are sky-high, fierce competition in the retail sector is helping hard-pressed families manage their budgets. Shop price inflation is now at its lowest for a year despite retailers having to cope with rising costs from suppliers and surging energy and distribution bills,” Stephen Robertson, British Retail Consortium Director General, said.
“For a second consecutive month the supermarket price war has helped reduce food inflation. As our recent research showed, a typical basket of goods purchased in the UK is around 5 per cent cheaper than the European average. Technology is making it easier than ever to compare prices. Accessing the internet on smartphones while out shopping is helping to make prices even more transparent.
“Inflationary pressures are easing. Cheaper commodities will help retailers keep prices down while the Chancellor’s decision to postpone January’s three pence increase in fuel duty will also benefit households. Retailers have protected consumers from the full impact of global commodity and currency shocks during 2011. In 2012 the Government should do more to reduce the costs it controls, chiefly business rates and the burden of regulation.”
These figures come just a day after UK retail sales growth figures were announced as their lowest in six months. Mike Watkins, Senior Manager, Retailer Services, Nielsen is concerned at the slow start to Christmas shopping period.
“It’s been a slow start to Christmas trading and many retailers have reduced prices further in recent weeks to help boost footfall and spend in store,” he said.
“This is reflected in the headline shop price index. We also have the impact of some commodity price increases of last year now falling out of the comparatives.
“However, the benefits for shoppers are being offset by a continued fall in spending power as other household bills continue to rise. The outlook for inflation is however much more positive than this time last year and shop price inflation is expected to fall further in the first part of 2012.”
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