Shop prices fell in December by -1.8% – the same rate of decline as in November, reports BRC-Nielsen in its latest Shop Price Index. 

This was below the 12- and 6-month average price decreases of -1.4% and -1.6%, respectively.

Non-food prices fell by -3.2%, compared to a decline of -3.7% in November. This was below the 12-month average price decline of -3.0% and in line with the 6-month average price decline of -3.2%, respectively.

BRC chief executive Helen Dickinson OBE comments: “It was welcome news for shoppers in the run-up to Christmas as prices fell in December. As in November, non-food prices dropped, and retail firms who have been hardest hit by the pandemic this year, such as fashion outlets, are continuing to offer discounts.

"Notably, food inflation eased to its lowest since March 2018, with a significant fall in fresh food prices. This was largely driven by last year’s decrease in global food prices filtering through onto British shelves, as well as the fierce competition between supermarkets to offer customers the best-value, quality goods in the face of testing circumstances.

“The successful agreement of a tariff-free deal with the EU will offer retailers a sigh of relief, but there are still huge cost pressures bearing down on them as the consequences of last year’s forced closures take effect and social restrictions continue to impact the new year. Therefore, it is absolutely vital that the Government provides additional targeted financial support and extends the business rates relief beyond April 2021. Otherwise, many more businesses will become unviable and many thousands of jobs could be at risk.”

Mike Watkins, head of retailer and business insight, Nielsen, adds: “Shoppers were cautious about Christmas with many expecting to spend the same or less this year, and after the disruption of the lockdowns in November non-food retail had a rollercoaster month, so keeping prices low will have helped maintain spend through to the end of December.

"For supermarkets, the shift of spend away from the hospitality channel gave a boost to sales but limits on family gatherings changed what was bought, and supermarkets focused on price cuts in seasonal and fresh food to encourage shoppers to spend on treats and indulgences, and to help make Christmas more affordable."