By Daniel Hunter

TalkTalk’s quarterly Digital Retail Price Index (DRPI) tracks the rate of inflation of a basket of goods bought online against comparable goods bought in-store.

The results from the report show that online prices are decreasing at the fastest rate since 2007, in what is also the most prolonged period of deflation online since Q4 2007.

A strong pound has increased UK online spending power and driven international prices down with the Digital Retail Price Index decreasing by 0.6% in 2012 compared to 2011. In contrast, the In Store Price Comparator — a measure of the price changes faced by a consumer if they replicated their online purchasing habits in a bricks and mortar store — increased by 1.5%
over the same period.

The report, conducted for TalkTalk by researchers at the Centre for Economics and Business Research, suggests that shopping online offers great value for money as annual inflation online compared to the high street diverges at the greatest rate yet.

Shehan Mohamed, economist at Cebr said: “We expect online prices will continue to fall for much of the year as competition on the internet picks up. The wedge between online and in-store inflation is likely to persist as high-street retailers struggle to manage their transport, energy and labour costs.”

Tristia Clarke, Commercial Director at TalkTalk, said: “Shopping online has never been more popular, and our research shows that people who shop online are benefiting from the best prices, as well as the convenience of shopping from home."

Over the last 18 months TalkTalk has invested in over 450 local communities to bring them affordable internet access and has helped found Go ON UK, a charity which aims to make sure every individual experiences the wide range of benefits that the internet had to offer.

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