Shop prices fall for sixth consecutive month

Shop prices fell for the sixth consecutive month, according to the November BRC-Nielsen Shop Price Index.

Overall prices fell by 0.5% year-on-year compared with a 0.4% price decrease in October.

Non-food item prices also decreased by 1.6% year-on-year. Meanwhile, food item prices increased 1.4% year-on-year, reflecting an ease in inflation from the 1.6% rise in October.  

Fresh food saw a 0.6% price increase, compared with a 0.8% increase the previous month.  Ambient food had only a 2.6% rise in prices, down 0.1% from October. 

This fall in prices was driven by strong crop yield of fresh fruits in the UK, as well as a fall in the global price of dairy.

Chief executive of the BRC, Helen Dickinson, said: “Shop prices continued to fall in November for the sixth consecutive month. 

“The economic and political uncertainty has weakened demand for non-essential items. As a result, retailers have pushed for even deeper price cuts to encourage consumers to open their wallets.”

She added: “While consumers will welcome the fall in prices in the run up to Christmas, there are various factors which could push food prices up in the longer term. These include the impact of flooding on the yields of many root vegetables and the rising global prices of meat. 

“However, the biggest threat to future prices remains the risk of a chaotic No-Deal Brexit pushing up the costs of EU imports, which account for 30% of the food we consume. The next Government should aim to provide clarity on the UK’s future relationship with the EU as soon as possible.”

Mike Watkins, head of retailer and business insight at Nielsen, said: “With fragile consumer confidence, retailers are keeping price increases to a minimum to encourage consumers to spend and there is little inflationary pressure coming from the high street.”

He added: “With Black Friday discounts and promotions already giving shoppers further savings, any new pricing initiatives to drive demand in the final weeks up to Christmas will need to be balanced to protect margins.”