In January, shop price deflation was recorded at 0.7%, slightly above the previous month's 1.0%. Non-food prices remained deflated at -1.8%, while food inflation eased to 1.6%. Fresh food inflation slowed to 0.9%, and ambient food inflation fell to 2.5%, indicating lower price rises. However, retailers are anticipated to confront substantial new costs, which could lead to rising prices in the near future. Helen Dickinson of BRC warned about the challenges ahead and emphasized the role of government in alleviating the situation for consumers.
While overall prices fell in January, the pace of shop price deflation eased. Extensive January sales were good for bargain hunters, but concerning for retailers needing to shift excess stock.
This month's figures show early signs of what is to come, with month-on-month food prices rising at their fastest pace since April last year. Ambient food saw a 1% jump.
Price cuts and deflation may not last much longer as retailers will soon feel the full impact of £7bn of new costs announced at the last Budget.
Government can help to mitigate the impact on consumers by ensuring its proposed reforms to business rates do not result in any store paying more in rates than they already do.
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