By Jonathan Davies
The deflation of overall shop prices continued for a ninth consecutive month in January, according to the British Retail Consortium (BRC).
According to the BRC-Nielson Shop Price Index, the rate of deflation accelerated to 1% in January, compared to 0.8% in December. This is the fastest pace at which overall shop prices have deflated since the index was launched in 2006.
In addition, the index showed that the inflation of food prices slowed in January. Inflation fell to 1.5%, compared to 1.7% in December.
There was also good news for non-food prices, as deflation increased from 2.3% in December, to 2.7% in January.
Helen Dickinson, British Retail Consortium Director General, said:
“Shop prices are falling at their fastest rate for 7 years, a new record for our data. January is always a key month for sales and promotions but discounts have been deeper and more widespread than last year and we are seeing this trend continuing. Our figures show that there have been particularly good deals to be had in clothing, furniture and electrical items this month as retailers prepare for their new collections.
“Hard pressed families will also have benefitted from the lowest levels of food inflation in almost four years. Our food retailer members have managed to keep prices low again and with relatively stable commodity prices at the moment as well, and forecasts for commodities quite upbeat, we may continue to benefit from this for some time yet.”.
Mike Watkins, Head of Retailer and Business Insight, Nielsen, said:
“The start of 2014 has seen a continuation of both slow retail growth particularly in food, and a continuation of slowing inflation. With the first few weeks of January a time when many households take stock of personal finances, the fall in shop price inflation will be a welcome boost for consumers”
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