UK retailers pre-Christmas discounting hits record high

According to the latest data released by the British Retail Consortium

(BRC) UK retailers offered the biggest price cut in at least seven years in December in hope of attracting holiday shoppers during the run up to Christmas.

The BRC-Nielsen Shop Price Index is a monthly measure of UK store price inflation. The BRC data found that store prices during early December had dropped 0.8 percent compared to the same period for 2012, which was the largest annual decline recorded for a single month since the BRC began its survey in 2006.

The data also highlighted a 10 percent decline in clothing prices in December, compared to the same period a year earlier. December was the sixth consecutive month of declining prices, underlining the difficult trading condition faced by British retailers in spite of signs of recovery in the economy.

Reuters previously reported that researched carried out by accountants at Pricewaterhouse Coopers (PwC) revealed that nearly 75 percent of British high street retailers had started discounting or advertising upcoming deals by the middle of December, with the average price discount being offered 46 percent.

Non-food prices dropped by 2.3 percent in December year-on-year, a little less than October's 2.4 percent decline, while food prices increased 1.7 percent which according to data from BRC is the smallest increase since June 2010. The BRC's data for store price inflation does not include e-commerce in the UK or additional costs such as transport, housing and energy.

Recent sales figures released by UK retailers show a wide range of sales performance for December, as UK consumers chose their holiday cash carefully. However some of the best results in terms of Christmas sales have been from department stores such as John Lewis and Next, who did not begin discounting until Christmas or Boxing day.

BRC Director General Helen Dickinson commented that this data revealed “a double whammy of good news for cash-conscious customers,” and added that it confirmed the firms “predictions that retailers worked hard to help budgets go that bit further this Christmas”. She added that the UK adopted sales holiday 'Cyber Monday' “also fell in the period covered by the index, so discounting was particularly commonplace”.