December discounts were “deeper and began earlier” for retailers

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December Discounts were “deeper and began earlier” for retailers
Retailers were forced to discount earlier across peak trading in an effort to lure in customers.
// Shop prices fell 0.4% year-on-year in peak trading
// Retailers discounted items for longer on the back of weak customer demand
// BRC CEO warns that the government must ensure “tariff-free and low-friction trade” to aid shop prices in 2020

Discounting in December meant shop prices continued to fall despite the month of peak trading.

Shop prices dropped 0.4 per cent year-on-year in December, coming in significantly beneath the 12-month average of flat shop prices.


READ MORE: Shop prices fall for the 6th month in a row


The BRC-Nielsen Shop Price Index found non-food retail prices were down 1.5 per cent for the period, more than the 12 decline of 0.9 per cent.

“The competition for the discretionary spend of shoppers intensified in December and discounts were deeper and began earlier, as retailers had to work even harder to keep customers shopping due to weak consumer demand,” explained Nielsen head of retailer and business insight Mike Watkins.

Meanwhile food inflation came in at 1.4 per cent, beneath the average 12 month increase of 1.7 per cent.

“Shop Prices continued to fall in December as receding inflationary pressures, weak consumer demand and intense competition combined to keep price increases at bay. 2019 has been a particularly challenging year, with historically weak sales growth,” said BRC chief executive Helen Dickinson.

“It is no surprise that December non-food prices fell significantly below the 12-month average for the fifth consecutive month as retailers pushed discounts in one last attempt to entice Christmas shoppers,” Dickinson added.

Looking ahead, Dickinson said any gains in shop prices would be “relatively modest” and that the highest risk to prices remains the outcome of Brexit negotiations.

“With a new year comes a new Government and the opportunity to reduce cost pressures on the retail industry. It is key that the future relationship between the UK and EU secures tariff-free and low-friction trade in order to ensure a fair deal for consumers. Any future deal must maintain choice and availability by keeping costs down,” she added.

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