Bigger discounts lead to drop in high street prices » SMEInsider

Bigger discounts lead to drop in high street prices

According to the British Retail Consortium (BRC), prices of shop items in Britain fell more sharply in the month of July than in June due to bigger discounts.

Overall, the BRC reported that shop prices reported that in July, deflation was 1.4 per cent lower than it was in June (1.3 per cent). According to Helen Dickinson, BRC director general, this drop marked the 27th consecutive month of price deflation.

“Clothing retailers were keen to shift their summer stock with widespread discounts clearly part of their strategy. Prices throughout this category fell on average by 4.9 per cent,” she continued.

On the other hand, food prices rose. The BRC reported annual inflation of 0.1 per cent, up from the 0.4 per cent decline in June 2015. This is the first inflationary rise in seven months.

However, Dickinson described this rise as a “short-term blip in the longer term downward trend, reflecting the on-going heightened levels of competition and it is not very significant”.

On a 12-month average basis, the Shop Price Index reported deflation of 1.7 per cent.

“Deflation in retailing has been a big influence on sales over the last 12 months, as has the unpredictable weather, price cuts and short term promotions. In food retailing, whilst ambient prices are becoming more stable, many fresh foods are again cheaper than this time last year and there have been some attractive sales and offers across non-food retailing in recent weeks. Shoppers are saving money which is helping consumer spend in the wider economy,” said Mike Watkins, Head of Retailer and Business Insight, Nielsen.