UK shop price deflation continues for 34th consecutive month

Although consumer spend is predicted to take a turn for the worst next year, 2016 is still a consumer market as shop prices continue to fall. According to the latest data from the British Retail Consortium (BRC) - Nielsen Shop Price Index, overall shop prices dropped 2 percent in February versus the 1.8 percent dip in January, making it the 34th consecutive month of decline.

Non-food shop price deflation was stagnant at 3 percent for the third month in a row, as "competition remains intense on the high street," said Mike Watkins, Head of Retailer and Business Insight, Nielsen. Shop prices within the clothing and footwear category increase from the 6.4 percent decline in January to 6.9 percent in February, the largest drop within the sector since April 2015. February was the sixth consecutive month in which the category report shop price deflation at 6 percent or higher.

"Another fall in shop prices was seen in February, down 2 percent compared with a year ago, and a further fall on the numbers we saw in January as competition in the industry continues apace," said BRC chief executive Helen Dickinson. "This now marks the 34th consecutive month of price drops and 35th for non-food prices. Within non-food, clothing, footwear, electricals, DIY and books all saw large reductions in prices, while the move back into deflationary territory in the food category confirmed that last month’s marginal rise was just a blip."

"With consumer confidence falling back and wage growth remaining subdued, retailers continue to support their customers with prices and promotions to maintain market share in the tough trading environment," added Dickinson.