Overall shop prices reported deflation for the 22nd consecutive month, accelerating to 1.7% in February, after reporting deflation of 1.3% in January. On a 12-month average basis the Shop Price Index reported deflation of 1.7%. Non-food deflation accelerated to 2.5% in February from 1.8% in January.
BRC director general, Helen Dickinson, says: “Prices in Britain’s shops continue to fall, this month by -1.7 per cent. That’s in line with the twelve-month average and has been largely driven by falling prices of non-food items.
“Those shoppers enjoying the January sales could continue into February with great bargains on the high street, especially for clothing. It was also worth a visit to the local DIY store or updating some house furniture with good promotions found in both categories.
“The fiercely competitive market will see retailers continuingly responding to their customers with keen prices and promotions to maintain market share.”
Mike Watkins, head of Retailer and Business Insight at Nielsen, says: “Since the start of the year, we have seen some very competitive pricing across both the food and non-food channels and this is helping to keep prices low for shoppers. With many commodity prices still falling, if shoppers can be encouraged to spend more, then retailers will be looking for volume sales increases over the next few months.”
In February, deflation in the Furniture and Floorcoverings category accelerated by one percentage point to 1.6% from 0.6% in January. House textiles and furniture, furnishings and carpets reported an acceleration in their deflation rates. Recent data on the housing market has been mixed. The Bank of England showed mortgage approvals edged up in January to 60,786 from 60,349 in December, the highest level since September 2014 but slightly below analyst forecasts. The Nationwide however, reported house prices rose at their slowest annual pace since September 2013, increasing by 5.7%.
