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Retail

Shop prices continue to fall, but Brexit concerns mount

By Huw Hughes

30 Sep 2020

Shop prices in the UK fell by 1.6 percent in September compared to August as retailers attempted to woo shoppers back into stores, new data reveals.

That’s below the 12-month average price decrease of 1.1 percent, but above the six-month average price drop of 1.7 percent, according to the latest BRC-Nielsen Shop Price Index. Non-food prices fell 3.2 percent in September compared to a fall of 3.4 percent in August.

But while shop prices may be falling, The BRC warned that a potential no-deal Brexit outcome could lead to higher prices on the horizon.

“Consumers can celebrate yet another month of falling shop prices, particularly in the Non-Food ranges such as clothing and footwear. Retailers are cutting prices in order to encourage further spending where sales are yet to pick up,” BRC CEO Helen Dickinson said.

“Retailers strive to provide the best value, quality goods, but their ability to do so, come 2021, is under threat. Without a zero-tariff deal with the EU, supermarkets will be subjected to 3.1 billion pounds a year of tariffs on food and drink, which they will have little choice but to pass on to their customers as retail margins are so thin.

“Many non-food retailers will also face large tariff bills, and as a result, the total cost to the industry and its customers would be much higher. The Government must prioritise a tariff-free deal, otherwise hard-pressed consumers will bear the brunt of price increases.”

Photo credit: FashionUnited