Shop prices fall in January amid post-Christmas Sales

Overall shop prices fell 1.7% in January, an acceleration from the 1.4% dip in December, according to the latest BRC-Nielsen Shop Price Index.

Price deflation in non-food rose to 2.3% in January, spearheaded by clothing and footwear, which registered a 6.3% decline in prices compared to the previous year.

Furniture and floorcovering prices tumbled 2.7% year-on-year, while electricals fell 2.4%.

Deflation was also recorded in DIY, gardening and homewares, although prices dropped at the slower rate of 1.9%.

The books, stationery and home entertainment category posted a 1.4% increase in prices, while inflation reached 0.6% in health and beauty.

According to the BRC-Nielsen data, food price deflation accelerated slightly to 0.8% in January, compared to a 0.7% decline in December.

Fresh food price deflation remained flat at 1.2% for the third consecutive month, while ambient food moved back into deflationary territory as prices edged down 0.2%.

British Retail Consortium chief executive Helen Dickinson said: “For now, consumers continue to benefit from falling shop prices year on year.

“However, fluctuations in the monthly figures belie an underlying trend of building cost pressures that are gradually feeding through from the fall in sterling combined with higher commodity prices.

“This will inevitably mean that we start to see a general upward trend in inflation over 2017.

“Retailers’ focus will be on protecting their customers from the effects of increasing input costs, but with the cost of doing business rising and margins and profits being squeezed, their efforts will require the support of public policies that help them keep prices low for shoppers.”