MNI: UK Dec Shop Price Deflation Accelerates On The Year: BRC

BRC Dec Shop Price Index Down O.6% y/y Versus -0.1% Y/Y November Outturn

By David Robinson

     LONDON (MNI) - Shop prices fell at the fastest pace in nine months in

December, with discounted non-food prices offsetting higher food prices,

BRC-Nielsen data showed.

     The British Retail Consortium-Nielsen Shop Price Index (SPI) fell 0.3% on

the month in December and posted a 0.6% drop on the year. The year-over-year

(y/y) fall in shop prices was the steepest since March 2017 and was courtesy of

non-food prices falling at their fastest rate since January 2017.  

     Non-food prices declined by 2.1% y/y, greater that than the 1.1% y/y fall

recorded in November, as retailers lowered prices at the start of the month in

the build up to the Christmas period. The BRC-Nielsen SPI is not seasonally

adjusted and thus does not discount for such seasonal promotions. 

     In December 2016 the BRC SPI showed a 2% fall on the year following a 2.1%

fall in November.

     On the month, non-food prices fell 0.4%, 0.3 percentage points greater than

the 0.1% fall registered in November. 

     Food price inflation, on the other hand, accelerated in December. The food

component of the headline index was up up 1.8% on the year from 1.5% in November

and closer to the 2.2% rise recorded in October. On the month, food prices were

unchanged after slipping 0.3% m/m in November. 

     "After several months of shop prices teetering on the edge of inflation,

December saw them retreat deeper into deflationary territory. Prices in December

fell at the fastest rate since March this year when only last month we saw the

shallowest rate of deflation for four years," said Helen Dickinson, BRC Chief

Executive.

     Headline UK CPI inflation set a new high in November, rising to 3.1% from

3.0% in October - the month Bank of England had previously forecast that

inflation would peak.

     These data reported by the BRC are consistent with the narrative of a

gradual deceleration in price inflation as we head into 2018 but given the

seasonal factors at play the data should be treated with caution.    

--MNI London Bureau; +44 203-586-2226; email: jamie.satchithanantham@marketnews.com

[TOPICS: MABDS$,M$B$$$,M$E$$$]