You are here: Home - Household Bills - News -

Consumer prices still falling

0
Written by:
01/03/2018
Data from the British Retail Consortium (BRC) shows shop prices continue to fall, dipping 0.8% year-on-year.

The BRC, which compiles the data with Nielsen, said shop prices have now been falling for 58 months. In particular, deflation in non-food prices deepened in February, with prices decreasing at a rate of 2.2% compared to January when prices declined by 1.9%. This represented the deepest deflation since April 2017.

This reflects a difficult time for non-food retailers in a week where both Toys R Us and Maplin went into administration. 2018 has already seen a number of high street casualties, including Warren Evans and Feather & Black.

In contrast, food prices continue to move in the opposite direction, rising 1.6% in February. However, this was a slower pace than in January, when they rose 1.9%. Fresh food saw slower inflation than ‘ambient’ food (shelf food), where prices rose at their fastest rate since September 2017.

Helen Dickinson, chief executive at the BRC said this was a further sign that we have passed the peak of the upward pressure on inflation caused by the fall in the pound in June 2016.

She added: “This will ease the squeeze on consumer incomes over the coming year, but it’s likely to do little to lift the rate of growth in consumption. Earnings are still falling in real terms, despite wages increasing, and savings are unlikely to provide the same support to spending that they have over the last 18 months.

“While it’s good news that earnings and inflation are heading in the right directions for consumers, retailers can expect to see more of the same; a tough trading environment over the coming months.”

Mike Watkins, head of retailer and business insight at Nielsen, said: “Food retailers continue to see sales growth and this is being supported by inflation, as the cost price of some food in particular ambient grocery has increased since the start of the year.

“However not all of the increases have been passed onto shoppers and we are now seeing food inflation beginning to peak. With structural changes in the non food retail landscape accelerating and consumers remaining cautious about discretionary spend, non food prices are still deflationary.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

ISAs: your back-to-basics guide for 2018/19

Here’s everything you need to know to make the most of your unused ISA allowance ahead of the 5 April deadli...

A guide to Sharia savings accounts

A number of Sharia savings products have upped their game in recent months, beating more familiar competitors ...

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
petrol prices rise
Thousands misfuel but 80% of insurers exclude mishap from cover

Every four minutes another driver puts the wrong fuel in their car but 80% of car insurance policies currently on...

Close