Overall shop price inflation fell 0.1 per cent to two per cent last month, its lowest for a year despite rising costs for retailers, it has been announced today.
The British Retail Consortium found that, while non-food inflation was unchanged at 0.8 per cent in November, food inflation fell to four per cent compared to 4.2 per cent the previous month, helped by the supermarket price war that has seen top grocery chains offer value for money to cash-conscious customers.
Stephen Robertson, BRC Director General, explained that fierce competition in the retail sector is helping consumers with tight budgets to manage their finances. Petrol prices and utility bills have risen over the course of the year and so competitive pricing is rife, helping to ease inflationary pressures.
Similarly, technological advancements are making price comparison easier than ever and ensuring a greater level of transparency, though Robertson feels that the government can do more to alleviate pressure on retailers.
“Cheaper commodities will help retailers keep prices down while the Chancellor’s decision to postpone January’s three pence increase in fuel duty will also benefit households,” he commented.
“Retailers have protected consumers from the full impact of global commodity and currency shocks during 2011. In 2012 the government should do more to reduce the costs it controls, chiefly business rates and the burden of regulation.”
Price increases have been eased by a slow start to Christmas trading, while promotions and reduced prices have been implemented by retailers hoping to increase footfall and in-store spending.
Comparative figures have also been affected by the impact of commodity price increases, as retailers may be faced with a tough festive season by a lack of pre-VAT incentives.
Mike Watkins, Senior Manager of Retailer Services at Nielsen, warned that, while this was good news for consumers, there are reasons to remain cautious this Christmas.
He said: “The benefits for shoppers are being offset by a continued fall in spending power as other household bills continue to rise.
“The outlook for inflation is however much more positive than this time last year and shop price inflation is expected to fall further in the first part of 2012.”