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'Three-year anniversary' for falling shop prices

Published 04/05/2016

April marked the three-year anniversary of falling shop prices
April marked the three-year anniversary of falling shop prices

April marked the three-year anniversary of falling shop prices in a "strong remedy" to weakened consumer confidence, new figures show.

Overall shop deflation of 1.7% in April - unchanged from the decline seen in March - was driven by intense competition across the industry, according to the BRC-Nielsen Shop Price Index.

Shoppers have now been able to fill their baskets and pay less for their goods than the year before for the last three years.

British Retail Consortium chief executive Helen Dickinson said: "This month marks an important anniversary for retailers and shoppers alike.

"The 36 consecutive months of price falls is being driven by intense competition across the industry.

"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 rate, low to betterment of the UK economy."

Food prices rose by a fractional 0.1%, the fourth time over the last 10 months, while prices for fresh goods fell 0.5% and the ambient category rose 1.0%.

Clothing and footwear saw a significant fall of 7.1%, highlighting the heavy discounting in the run up to the summer season.

Ms Dickinson added: "Hopefully today's anniversary of falling prices will be a strong remedy to consumer confidence which has weakened significantly since the beginning of the year."

Mike Watkins, head of retailer and business insight at Nielsen, said: "The underlying trend in shop prices is downwards with continued price cutting by supermarkets which is driving deflation.

"Further discounts may also be necessary on the high street as the cool spring has impacted the sales of many retailers, and an increase in the levels of promotion over the next few weeks to drive footfall is not out of the question."

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