The latest data from the British Retail Consortium (BRC) has shown shop price inflation slowed to 2.9% in January, from 4.3% in December 2023.
The BRC and NielsenIQ shop price index credited non-food goods for driving the fall, down to 1.3% in January from 3.1% in the final month of 2023.
This also marked a drop below the three-month average rate of 2.4%, and positioned non-food inflation at its lowest point since February 2022.
Helen Dickinson, CEO of BRC, explained that retailers offering “heavily discounted goods in their January sales” enticed consumer spending amidst weak demand.
Additionally, food inflation declined to 6.1% in January from 6.7% in December 2023. This reduction in food inflation was part of a consistent trend, with January marking the ninth consecutive month of deceleration in the category.
While the inflation slow down was welcomed by the BRC, Dickinson warned of new challenges for retailers in 2024.
“Retailers have spent the last eight months working to bring down inflation, but progress will likely be hampered by new cost pressures coming direct from government – including implementing the increase in the National Living Wage on top of an above-inflation rise in business rates this April, a potential new grocer ‘surtax’ in Scotland, and ill-conceived recycling proposals,” she noted.
“Rising geopolitical tensions will also add to uncertainty and costs in supply chains. With a general election later this year, we want to see political parties outline how they will help unlock investment across the country rather than the current trajectory which is doing just the opposite.”
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