Shop prices remain in deflation, unwinding promotions slow movement in fashion

New figures by the British Retail Consortium (BRC) and NielsenIQ have shown shop prices remained in deflation for the period May 1 to 7, yet heavy promotional activity in fashion slowed movement.

Overall deflation was unchanged at 0.1 percent year-on-year during the reported period, against a decline of 0.1 percent in April. This came above the three-month average of -0.2 percent.

As food inflation increased to 2.8 percent, non-food deflation fell to 1.5 percent, against a decline of 1.4 percent in the month prior.

In a statement, Helen Dickinson, chief executive of the BRC, said that while non-food prices remained in deflation, “this slowed in categories such as fashion and furniture as retailers began to unwind heavy promotional activity”.

Commenting on the figures, Mike Watkins, head of retailer and business insight at NielsenIQ, said: “Whilst shoppers are seeing savings at the checkout as retailers increase promotional activity, increasing prices is still an extra challenge to consumer spending alongside rising household bills.

“And if consumer confidence remains weak as looks likely, then retailers may have to work harder to encourage shoppers to spend over the summer.”