Recent data indicates a slight slowing in shop price deflation, yet shoppers can still find bargains.
- The latest BRC-NielsenIQ Shop Price Index shows shop price deflation at 0.6% in November, up from 0.8% in October.
- Non-food prices remain in deflation, with a slight improvement from -2.1% to -1.8% compared to the previous month.
- Food inflation decreases marginally, from 1.9% in October to 1.8% in November.
- Future cost pressures, including increased business rates and a new packaging levy, may lead to higher prices.
New findings from the BRC-NielsenIQ Shop Price Index reveal that shop price deflation eased slightly in November, standing at 0.6%, a modest decrease from October’s 0.8%. This change is still slightly above the three-month average rate of -0.7%. The annual shop price growth remains at its lowest rate since September 2021, highlighting ongoing deflationary trends despite the slight shift this month.
Non-food items continue to experience deflation, with prices improving from -2.1% in October to -1.8% in November. Despite this uptick, the rate remains above the three-month average of -2.0%. Helen Dickinson, CEO of the BRC, notes that the current period marks the first time in 17 months that shop price inflation has risen compared to the previous month, though it remains in negative territory.
Amidst these economic conditions, many fashion and furniture retailers continue to offer attractive bargains, appealing particularly to consumers seeking deals during the early Black Friday period. Notably, customers aiming to upgrade their electronic devices enjoyed beneficial savings.
In parallel, food inflation has decreased slightly, with November’s rate at 1.8%, down from 1.9% in October, indicating a minor retreat in food costs.
Looking ahead, significant cost pressures loom over the retail sector. Anticipated expenses in 2025 include £7 billion in additional costs due to changes that encompass Employer’s National Insurance Contributions, business rates, an increase in the minimum wage, and a new packaging levy. These financial strains pose a challenge for retailers who already navigate thin profit margins. Dickinson suggests that to mitigate these impacts, adjustments to government timelines and business rates are crucial.
The current landscape still offers fashion bargains despite slowing deflation, but future cost pressures may change this dynamic.
