MNI: UK October Shop Prices Back Inflationary, Just -- BRC

--Shop Prices Up 0.1% y/y, Following October's 0.2% Fall

By Jai Lakhani

     LONDON (MNI) - UK shop prices rose 0.1% y/y in November after a 0.2% fall

in October, showing inflationary pressure -- albeit modest -- for three out of

the last five months, data from the British Retail Consortium (BRC) shows.

     On a monthly basis, the BRC Shop Price Index (SPI) was up 0.1%, compared to

a fall of 0.3% in October.

     Food price inflation rose to 1.6% y/y in November, up from 1.3% in October

but still below September and August which saw food inflation of 1.9% y/y. The

reason for food price inflation was due to a base effect combined with higher

global cereal prices pushing up on several foods included in the index, the BRC

said. 

     Fresh food inflation rose to 1.2% in November, up 0.2pp from October's y/y

reading and ambient food inflation accelerate by 0.3pp to 2.1% in November. 

     While non-food prices were lower in November compared to the same month

last year, the index appeared to be dragged lower by deflation in clothing and

electricals, with all other non-food categories showing modest year on year

inflation. This meant non-food deflation was 0.8% y/y, the lowest rate since

March 2013. 

     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.

     "As we approach the Christmas season, the good news for consumers is that

prices have remained almost unchanged in November. Furthermore, falls in the

price of clothes and electrical goods will be a welcome bonus as the public

prepare to do their Christmas present shopping," said Helen Dickinson, Chief

Executive at the British Retail Consortium.

     --CHRISTMAS DISCOUNTING

     "Prices continue to fall in non-food as shoppers are still cautious about

spending. We have also seen deeper promotions ahead of Black Friday and the

wider benefits from membership schemes also being messaged to shoppers... we can

expect further price cuts as the battle for shopper loyalty this Christmas

begins to heat up," said Mike Watkins, Head of Retailer and Business Insight at

Nielsen. 

--MNI London Bureau; +44 203 865 3828; email: jai.lakhani@marketnews.com

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

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