Prices in UK Shops Continue to Fall

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For the 22nd consecutive month prices in British shops reported deflation.

The British Retail Consortium-Nielsen Shop Price Index has revealed a fall of the prices in British shops of 1.7 per cent in February, which followed a reported deflation of 1.3 per cent in the previous month.

Non-food deflation accelerated to 2.5 per cent in February, a fall of 0.7 per cent from the 1.7 per cent reported deflation in January.

Food reported a more stagnating deflation of 0.4 per cent in February, edging to its lowest level on record, which compared to the 0.5 per cent the month previously.

BRC Director General, Helen Dickinson, explained that the deflation has been largely driven by falling prices of non-food items because "shoppers enjoying the January Sales could continue into February with great bargains on the High Street, especially for clothing".

"It was also worth a visit to the local DIY store or updating some house furniture with good promotions found in both categories," she said.

Mike Watkins, Head of Retailer and Business Insight at Nielsen, added that the challenge for food retailers is that in store promotions also remain close to an all-time high, at 33 per cent of sales.

He said: "The use of vouchers or coupons continues, making consumer demand rather unpredictable. Even so, shoppers are seeing a double benefit of price cuts and promotional offers."

How does the deflation affect your business? Discuss the latest figures with your peers at the Customer Experience Exchange for Retail! The exchange is an invitation-only forum, which brings together 60 C-level & VPs/Directors of Customer Experience, Marketing, eCommerce and Retail from Fortune 500 retailers. It takes place in London from 6 - 8 July 2015.