BRC Shop Prices Ease Further

BRC NOV SHOP PRICE INDEX -1.8% Y/Y VS -1.2% Y/Y OCT

BRC NOV SHOP PRICE INDEX -0.6% M/M VS +0.3% M/M OCT

UK annual shop prices fell again in Nov, shifting below the 12-month and 6-month averages of -1.3% and -1.5%, respectively. Nov's shop price index declined by 1.8% y/y following Oct's drop of 1.2% y/y. While food inflation ticked up by 1.3% on an annual basis, non-food prices plunged 3.7% after declining 2.7% in the previous month. As a result, Nov's drop in prices was mainly driven by prices non-food products as demand was weak and firms continued discounting to encourage spending. However, the BRC expects food prices to increase at a faster pace after the Brexit transition period. Many retailers are in a precarious financial decision after the second lockdown and without government intervention a number of stores is likely to close and jobs will be lost, according to the BRC.