— BRC: UK Jan Shop Prices 1.4% y/y Versus 1.7% Dec
LONDON (MNI) – Shop price inflation in January fell to its level
since March 2010 as non-food price inflation evaporated, according to
the latest report from the British Retail Consortium and Nielsen.
The January BRC Shop Price Index was up 1.4% on the year, down from
1.7% in December, with non-food prices flat on the year. The data add to
the evidence UK consumer prices are, as the Bank of England has
predicted, falling rapidly.
Month-on-month, shop prices rose 0.3% compared to December’s 0.1%
fall.
Food inflation on the year was down to 3.7%, its lowest level since
July 2010 when it was 2.5%. This compares to the 4.2% seen in the
December report. Food prices were up 1.1% on the month after a 0.4% rise
in December.
Non-food inflation was flat in January compared to a year ago, its
lowest outturn since back in November 2009 and was down 0.2% on the
month compared to December’s 0.3% fall.
The report says the decline in shop price inflation was due in part
to last January’s VAT increase falling out of annual comparisons. Other
factors bearing down on this rate include the continuing easing in
commodity markets and freight costs.
The BRC expects further easing in inflation over the coming months
as declining pressures work their way through the supply chain and
retailers continue to use promotions and discounts to drive sales in the
weak consumer environment.
The Office of National Statistics will release its January
inflation data on Tuesday, February 14. There is no simple read across
from the BRC shop price data to the official inflation numbers, but some
economists use the BRC figures as a guide to sectoral moves, especially
in food prices.
The Bank of England most recent forecast projected CPI falling from
4.7% on the year in Q4 to 3.4% on the year in Q1 and then down to 1.7%
by Q4 2012. The BRC data do show high street inflation falling at the
start of Q1.
Stephen Robertson, Director General of BRC says that “Even though
retailers are facing higher transport and property costs, overall
non-food prices are exactly the same as a year ago. Within that,
clothing, furniture and electricals were all cheaper than 12 months ago
with the price of electrical goods falling at its fastest rate for three
years.”
Mike Watkins, Senior Manager of Retail Services at Nielsen says
that as shoppers are showing a tendency to economise in 2012, and with
post-Christmas sales off to a slow start, “food retailers in particular
continued to offer savings in January with price cuts and promotions on
everyday items being used across the industry.”
Sanjukta Moorthy is a reporter at Need to Know News, +44 207 862
7485 sanjukta.moorthy@ntkn.com
[TOPICS: M$B$$$,MABDS$]
