Belfast Telegraph

Drop of 1% in shop prices marks five years of deflation

By Vicky Clarke

Shop prices fell 1% in April to mark five years of deflation - bringing good news for Northern Ireland consumers, it's been claimed.

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The overall drop in prices into last month represents the deepest period of deflation since February last year as upward pressure from the fall in the pound weakened, according to the BRC-Nielsen Shop Price Index.

The price of non-food items decreased further at a rate of 2.2% compared with March's 1.9% fall, but food inflation picked up to 1% from 0.4% a month earlier on the back of higher global commodity prices.

Fresh food prices rose by 0.9% after three consecutive months of slowdown, up from 0.3% in March, while ambient food inflation accelerated to 1.2% from 0.6% the month before.

Aodhan Connolly, director of the Northern Retail Consortium, said: "Northern Ireland consumers are benefiting from intense competition in the retail industry which is helping to keep down prices on shop shelves, good news for households at a time when other domestic cost pressures are rising.

"This should provide a welcome stimulus for retailers' sales volumes, if not necessarily the overall value of their sales across NI."

British Retail Consortium chief executive Helen Dickinson said higher commodity prices had pushed up food price inflation but that retailers had offered lower prices on non-food prices items to draw in customers.

Mike Watkins, head of retailer and business insight at Nielsen, said: "With weak consumer demand, any success in sales performance is coming at the expense of retailers' margins, with lower prices in non food and inflation now hovering around 1% in food stores.

"Recent industry data suggests poor footfall and with unseasonably cool weather punctuated by a brief hot spell, sales momentum has been hard to sustain."

Belfast Telegraph