Gardening a factor in retail deflation

Overall shop prices reported deflation of 2.1 per cent in November from a 1.8 per cent decline in October, a joint record low.

British Retail Consortium chief executive Helen Dickinson said the fall was because "retailers are continuing to invest in price, intense competition in the run up to Black Friday and lower commodity prices."

She added: "November also marked the 31st consecutive month of deflation and the 32nd consecutive month of non-food price drops. Non-food prices saw a remarkable 3.3 per cent drop, driven largely by reductions in clothing, footwear, electricals, DIY, gardening and hardware prices. Although the survey period does not cover Black Friday, it is likely that some retailers were discounting early in November in order to spread consumer spending over a longer period. Electricals for instance saw prices down 4.3 per cent on last year.


"Food prices fell by 0.3 per cent as the impact of past falls in oil, weaker demand in emerging markets and a strong pound, helped support a continued deflationary environment. Lower commodity prices will help food retailers to continue to offer the best possible prices. Coffee, lean hogs, soybean, and cattle feeder all demonstrated double digit declines in the 12 months to the end of our survey period.


"This trading environment should be considered with the impact of the industry’s regulatory burden. BRC analysis shows that the combined cost of policy announcements since the General Election adds up to approximately £14 billion over the next five years. The industry will continue to make the case to government, which has extended its review of business rates to early 2016, to properly look at rebalancing this tax away from property intensive industries in order to ensure that the introduction of the living wage does not have unintended consequences on our local communities and jobs ."


Mike Watkins, Head of Retailer and Business Insight, Nielsen, said: "For best part of two years we have had shop price deflation which has helped overall consumer spend remain buoyant, and with consumer confidence back to an all-time high, shoppers are now feeling more optimistic about spending. Falling prices across the High Street and food retailers in November will be another welcome boost for shoppers as they plan their Christmas spending." 


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