MNI: UK Jan Shop Prices Extend Gains In Jan; M/M Weaker-- BRC

--BRC January Shop Prices Up 0.4% y/y v December +0.3% y/y

By Jai Lakhani

     LONDON (MNI) - UK shop prices rose 0.4% y/y in January, the pace

accelerating from 0.3% in December, marking the fifth month of annual shop price

inflation in of the last six months. The rate was also the highest inflation

rate since April 2013, data from the British Retail Consortium (BRC) shows. 

     On a monthly basis, the BRC Shop Price Index (SPI) was down 0.4%,

accelerating from a 0.1% fall in December.

     Food price inflation stood at 1.5% in January, unchanged from December. The

rate of non-food deflation decelerated to its lowest rate since March 2013 in

January. Non-food deflation was down to -0.3% from -0.4% in December. 

     The SPI covers only a slice of the UK consumer price basket, with the

non-food element of the index covering some of the same ground as core goods

inflation in the official data.

     "Despite significant post-Christmas discounting, shop prices in January

were slightly up on last year. Promotions have become the norm in recent years,

but it was never going to be possible to continue making seasonal price cuts

deeper each year; especially given that the cost of importing many of the goods

we buy increased with the post-referendum fall in the pound," said Helen

Dickinson, Chief Executive at the British Retail Consortium.

     "Consumers have little to fear in terms of inflation over the coming months

with many of the underlying pressures on prices easing. That is unless the UK

leaves the EU without a deal on the 29th March, leading to increases in the

price of many goods in the weekly shopping basket," she added

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     "With shoppers looking to make savings on household bills and sentiment on

the turn, it's good news that shop price inflation is broadly unchanged this

month. Intense price competition between food retailers at the start of the year

is protecting customers from rising prices and there is no inflationary pressure

coming from the high street as retailers, faced with weak demand, continue to

absorb the impact of any rising costs themselves. The retail outlook is for low

growth over the next couple of months and for shop price inflation to remain at

around current levels, and less than CPI," said Mike Watkins, Head of Retailer

and Business Insight at Nielsen. 

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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