British Retail Consortium has reported that overall shop prices deflation of 1.7% in April 2016, unchanged from the decline seen in March 2016. This is in-line with the 12-month average- Non-food deflation accelerated to 2.9% in April from the 2.6% fall in March. This is deeper the 12 month average of 2.7%.
Helen Dickinson OBE, Chief Executive, British Retail Consortium, “This month (April 2016) marks an important anniversary for retailers and shoppers alike. We’ve seen three years of falling shop prices, with prices falling by 1.7% in April compared to a year earlier. The thirty-six consecutive months of price falls is being driven by intense competition across the industry. It has knock on implications for margins and profitability given the combination of continued investment in digital and rising cost pressures, compounded by recent policy announcements. Ensuring they do not pass on these cost increases, alongside the intensity of competition in the market, are the principal reasons why retailers continue to respond to their customers’ demands for value. As this month’s figures show, this has helped shoppers and kept inflation (and therefore interest rates) low to betterment of the UK economy.” She added, “Non-food prices marked the thirty-seventh month of deflation, with prices falling 2.9% during the month. Excellent bargains were to be found in clothing and footwear, electricals and furniture and floorcovering. Clothing and footwear saw a significant fall of 7.1%, highlighting the heavy discounting in the run up to the summer season.”