UK retail prices report biggest fall since 2006
- 10th July 2014
- Business & Economy
British retailers have reported their biggest annual decline in prices since June 2006, according to a new survey.
The British Retail Consortium (BRC) revealed that overall shop prices experienced deflation for the 14th consecutive month, falling by 1.8 per cent last month, the “deepest” since its index came into existence.
Another record was achieved with food inflation, which fell to an astonishing 0.6 per cent in June. Meanwhile, non-food items experienced a quickening in deflation, recording 3.4 per cent last month (it was 2.8 per cent in May).
Helen Dickinson, director general of the British Retail Consortium, commented that the figures for June have delivered “plenty of good news for cash-conscious customers”.
She said that it also confirms the fact that retailers are working exceptionally hard to deliver more value for money, endeavouring to set prices that allow households to better manage their budgets and afford basics like food.
“This is the deepest level of deflation in non-food and the lowest rate of inflation for food since 2006 when our records began,” Ms Dickinson continued.
“Added to this, we see that consumer confidence is at its highest level since April 2005. Fierce competition among grocers has driven food price inflation to record low levels and with some grocers having announced plans to keep prices down, consumers stand to benefit for a while to come.”
Additionally, retailers have been buoyed by favourable economic conditions, with, for example, commodity markets remaining stable.
Complemented by the growing strength of the sterling, this will create the conditions necessary for low inflation over the medium term.
Mike Watkins, head of retailer and business insight at Nielsen, added that the high street has continued to generate marginal inflationary pressure.
“Little in the way of immediate seasonal or weather related price increases is anticipated so the outlook for the next three months is for relatively stable shop price inflation,” he explained.
“Helped by the increases in consumer confidence since the start of the year, this should encourage shoppers to spend more freely over the summer months.”
< Top image: Mall Secrets >
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