Shop prices fall in August but Brexit uncertainty looms

Shop prices in the UK fell by 1.6 percent last month compared to a drop of 1.3 percent in July.

Non-food prices fell by 3.4 percent compared to a decline of 2.9 percent in July, according to the latest BRC-Nielsen Shop Price Index.

Helen Dickinson, CEO of the British Retail Consortium, said in a statement: “Consumers will welcome another month of falling prices in shops. The faster rate of decline was driven by cheaper non-food goods, as many retailers have continued to run promotions and sales in order to entice customers to spend and make up for lost ground during lockdown.”

However, Dickinson warned that the lower prices are already under threat from increased costs associated with coronavirus safety measures and “are certain to rise” if the UK leaves the transition period without a trade deal with the EU.

“The absence of a tariff-free deal will lead to higher prices for consumers as thin retail margins force retailers to raise prices in response to higher import costs,” Dickinson continued. “Furthermore, without a deal that reduces checks and red-tape, the UK supply chain faces severe disruption, reducing the availability of goods and further raising prices for consumers. It is essential that the Government ensures the British public are front of mind in their negotiations, otherwise it will be consumers, retailers and the UK economy that will suffer.”

Photo credit: FashionUnited

 

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