The supermarket price war and growing competition on the High Street caused shop prices to fall by a record amount in November, according to the British Retail Consortium (BRC).
The BRC's shop price index, conducted alongside analysts Nielsen, showed that retail prices were down 2.1% in the year to November, compared with the previous year. It follows a fall of 1.8% in October and marks the 31st consecutive month in which retail prices have fallen.
Despite the intensity of the supermarket price war, the BRC said that non-food prices fell by a particularly high 3.3%. Clothing, footwear, electricals, DIY, gardening and hardware accounted for the majority of the fall. Supermarket prices in fact fell by just 0.3%.
The BRC said the data does not include figures for Black Friday and Cyber Monday. However, it did say that retailers did cut prices during November in the run-up to the discount weekend.
Helen Dickinson, director general of the British Retail Consortium, said: “Shop prices fell by 2.1% last month as a result of retailers continuing to invest in price, intense competition in the run-up to Black Friday and lower commodity prices, marking a joint record low for falling prices.
“Food prices fell by 0.3% as the impact of past falls in oil, weaker demand in emerging markets and a strong pound, helped support a continued deflationary environment.”
Ms Dickinson also warned that the introduction of the national living wage in April will cost retailers a collective £14 billion between now and 2020.
She said: "This trading environment should be considered with the impact of the industry’s regulatory burden.
“BRC analysis shows that the combined cost of policy announcements since the General Election adds up to approximately £14bn over the next five years.”
