LONDON: Shop prices slumped by a record level last month, driven down by the supermarket price war and fierce competition across the rest of the high street, a report said.
The British Retail Consortium-Nielsen Shop Index said retail prices fell 2.1% in the year to November compared with a year ago, a joint low with March this year.
The fall follows a plunge in prices of 1.8% in October, while the report added that the November drop marked the 31st consecutive month of falling retail prices.
The data does not cover the Black Friday sales period, although the survey said retailers cut prices across the month in the run-up to the sales weekend, which also included the online sales day Cyber Monday. It said non-food shop prices tumbled by 3.3% over the period, driven by reductions in clothing, footwear, electricals, DIY, gardening and hardware.
Under-pressure supermarkets saw prices fall by just 0.3%, as raw commodities such as coffee, soybean and cattle feeder suffered double-digit declines over the last 12 months. British Retail Consortium director general Helen Dickinson 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.”
She added that government announcements made since the general election in May, such as the introduction of the “national living wage” next April, will cost retailers around £14bn between now and 2020. Dickinson 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.”
Nielsen head of retailer and business insight, Mike Watkins, said shoppers have enjoyed falling sales “for the best part of two years”.