Stiff competition and weak demand drive down shop prices - BRC
By Abigail Townsend
Date: Wednesday 26 Feb 2020
(Sharecast News) - Shop prices continued to fall in February, research published on Wednesday showed, driven lower by weak consumer demand and stiff competition.
The BRC-Nielsen Shop Price Index reported a 0.6% decrease in February year-on-year, compared to a 0.3% decline in January. The figure was below both the 12-month and 6-month averages, of 0.1% and 0.5% respectively.
Non-food prices fell 1.9%, compared to January's fall of 1.5%, the highest rate of decline since May 2018.
Food inflation, meanwhile, held steady at 1.6%. The figure was marginally below the 12-month average price increase of 1.7%, but above the six-month average of 1.4%.
Helen Dickinson, chief executive of the British Retail Consortium, said: "Consumers will welcome the fall in shop prices, with non-food prices falling at their highest rate since May 2018. This decline was driven by weak consumer and intense competition, which lead may retailers to prolong their January sales.
"In contrast, some non-perishables, such as cereals, have caused overall food prices to rise. This is likely to worsen as global food prices have been growing at a double digit rate for the past three months."
Fresh food inflation eased to 0.6%, the BRC said, from 0.7% in January, below the 12-month and 6-month averages. Ambient food accelerated to 3.0%, however, from 2.8% a month previously, the highest inflation rate since April 2018.
But Mike Watkins, head of retailer and business insight at Nielsen, said: "While there was a slight increase in food prices this month, this is not going to change how we shop and what we buy, as the wider concerns that consumers have about their own finances continue to make them cautious about spending.
"But if consumer price inflation increases further over the new few months, and if sales growths remain weak, them more retailers may been to compensate with extra promotions and deeper price cuts."
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN