MNI BRIEF: UK Shop Prices Fall Further As Discounting Extended

The UK BRC shop price index fell further in November, declining 1.8% y/y following a drop of 1.2% y/y in October. Food inflation ticked up by 1.3% on an annual basis, but non-food prices plunged 3.7% after declining 2.7% in the previous month.

"This was mainly driven by non-food products, where prices have fallen at a much quicker rate than the previous month. Where demand was weak for some products, discounting has followed, with many retailers trying to encourage more consumer spending, particularly those selling fashion and DIY goods." Helen Dickinson from the BRC noted. The BRC expects food prices to increase at a faster pace after the Brexit transition period.

Many retailers are in a precarious financial position after the second lockdown and without government intervention a number of stores are likely to close and jobs will be lost, according to the BRC.