Retail prices fall yet again in February
Retailers reported deflation for the tenth consecutive month in February, accelerating to 1.4% from 1.0% in January – the deepest level of deflation since December 2006.
Non-food reported annual deflation of 3.0% in February from 2.7% in January – the lowest ever recorded and food inflation slowed to 1.1% from 1.5% in January – the lowest ever recorded, according to the British Retail Consortium-Nielsen Shop Price Index.
'This is the fastest fall seen in prices which are 1.4% overall in February. It is also the longest sustained period of price decreases we have witnessed, now ten months in a row. There are especially good deals available at the moment in clothing, electricals, books and stationery,' says Helen Dickinson, BRC director general.
'Hard-pressed families watching their budgets will also be helped by the lowest level of food inflation we've recorded, up just 1.1% in February. In contrast to other household bills, the price of the weekly food shop is rising at a much slower pace. Many of the larger food retailers have been looking closely at their investment in promotions and price cuts, suggesting competition could intensify further. This should mean consumer price inflation remains at low levels in the coming months. It is clear that retailers' hard work to keep prices low for UK consumers is having considerable success.'
Mike Watkins, Nielsen head of retailer and business insight says: 'We have seen further falls in the Shop Price Index at the start of 2014 in particular in food. This is reflective of a challenging trading environment due to weather and weak demand, but also more favourable global supply conditions during the second part of 2013. Looking ahead, we still anticipate shop prices to remain below CPI for the immediate future.'