Shop prices slid deeper into deflationary territory in December, as retailers continued to offer discounts on non-food products.
The latest shop price index from the British Retail Consortium and Nielsen found that shop prices fell 0.6% on last year compared to the 0.1% decline in November.
This is the deepest deflation since March 2017.
Non-food prices fell at their fastest rate since January 2017, declining 2.1% year on year compared to 1.1% in November.
This was good news for consumers, as discounting offered “much needed breathing room” during the festive period at a time when the cost of their food shop is on the rise, BRC chief executive Helen Dickinson said.
But Mike Watkins, head of retailer and business insight at Nielsen said offering discounts came at a cost to some retailers, in many cases eating into margins – especially of non-food retailers.
“With consumer confidence wavering and unpredictable levels of demand, many non-food retailers have been keeping prices low to stimulate spending, which will undoubtedly have come at a cost to margins,” he explained.