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Christmas cheer as shop prices continue falling

Shoppers look likely to get a boost in the run-up to Christmas as the cost of non-food products fell for the 10th consecutive month, retailers said today.

The cost of items such as clothes, electrical goods and furniture was deflationary again last month, the British Retail Consortium (BRC) said.

In September, shop prices were lower than the same period last year for the second month in a row.

Stephen Robertson, Director General of the BRC, said: “More good news for customers. Overall shop prices are down on a year ago for the second month in a row. Prices for non-food goods have been deflationary for 10 consecutive months now with clothing, electricals and furniture showing the biggest falls as retailers discount to generate sales.”

Deflation on non-food products remained at 1.4% in September, but the Consortium said this is likely to slow until the cut in VAT is removed in January.

The exception was annual inflation of the cost of health and beauty products, which rose to a record high of 3.3%.

Food inflation rose from 2.3% in August to 2.5%, but this was down to an increase in the cost of tinned and packet food, the BRC said.

Since March, food inflation has fallen from 9% to the current rate.

Mr Robertson went on: “Fresh food inflation fell to its lowest level since the index began in 2005 - a dramatic contrast with a year ago. Shop prices for some manufactured foods increased more quickly than last month as big increases in the world prices of sugar and cocoa pushed up costs but this wasn’t enough to affect overall shop price inflation.

“Generally, lower prices are likely to go on helping households in the run up to Christmas.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .