Shop price deflation at 0.1% for third month in row

SHOP prices have remained teetering on the edge of a return to inflation for the third consecutive month against a backdrop of higher import costs and a squeeze on discretionary spending.

Shop prices decreased at an annual rate of 0.1% for the third consecutive month in November, the shallowest deflation rate in the last four years, according to the BRC-Nielsen Shop Price Index.

Non-food deflation eased in November to 1.1% from 1.5% in October, the lowest rate since May 2013.

However, in some good news for grocery shoppers ahead of Christmas, food inflation overall fell back in line with global prices to slow to 1.5% from 2.2% in October, and fresh food inflation decelerated sharply to 1.3% from 2.2% in October.

British Retail Consortium chief executive Helen Dickinson said: “For the third consecutive month, shop price inflation remained static, still teetering on the edge of a return to inflationary territory.

“The lower projections for consumer spending that came from the Office for Budget Responsibility’s downbeat forecast last week, and uplifts in labour costs, conjure up a perfect storm of economic pressures looming over an industry that’s already fiercely competitive.

“That’s why we were pleased that the Chancellor listened to us and others and brought forward the switch from RPI to CPI.”