Overall shop prices report annual deflation in November in UK

6 December 2013 (Last Updated December 6th, 2013 01:20)

For the seventh consecutive month in November, overall retail prices reported annual deflation, slowing to 0.3% from the 0.5% decline reported in October.

Food inflation slowed to 2.3% in November as against 2.7% in October, while non-food had seen an annual deflation of 2% in November from 2.4% in the previous month.

British Retail Consortium director general Helen Dickinson noted that the seventh consecutive month of deflation is great news for hard-pressed households as Christmas gets closer, and confirms that retailers are reading current conditions well and matching the mood in their promotions and product offers.

"Food inflation fell to its second lowest level since June 2010, driven mainly by fresh produce, which indicates that there are plenty of good deals to be had as customers start stocking up on seasonal fare."

"A better global harvest has led to lower commodity prices, particularly for oil, and with few signs of volatility in the system at present I would expect levels to remain fairly stable in the coming months."

Since March this year, non-food has been deflationary and November continued the trend, primarily fuelled by promotions in fashion, furniture and electricals.

In areas where deflation slowed, it was mainly due to a natural levelling off of some early Christmas offers, especially in the books category following ‘Super Thursday’.

"There are some encouraging signs in here for anyone starting to make some headway on their Christmas lists," Dickinson added.

Nielsen Retailer and Business Insight head Mike Watkins noted that across most of the industry it has been a slower than usual start to Christmas trading and they expect retailers to keep promoting to help drive footfall.

"The good news for consumers is that inflationary pressures are less prevalent this year than in previous years."

"So with sales momentum now starting to build, we anticipate some good festive deals for the savvy Christmas shopper," Watkins added.