Shop prices jump in December despite seasonal discounting

Shop prices climbed in December as a flurry of festive discounting from retailers was countered by a jump in ambient food prices and slow deflation of general merchandise.

Figures released on Friday by the BRC-Nielsen Shop Price Index show that prices increased by 0.3% compared to the same month last year and by 0.1% when compared to November.

Ambient food prices increased by 2.3%, up from 2.1% in November, while non-food deflation decelerated to 0.4% from 0.8%.

BRC boss Helen Dickinson said that the figures highlighted the need for parliament to come together and agree on a Brexit deal “that ensures frictionless, tariff-free trade”, as a ‘no-deal’ situation could “see prices paid by UK households rise substantially”.

Andy Soloman, business growth expert and chief executive at market researchers Yomdel, said: “Not only does the changing face of retail mean they need to continue to pivot in order to remain relevant against the growing tide of online shopping, but the possibility of no EU trade deal could see our imports become far more expensive.”

Soloman added that this could be “disastrous” for the retail sector, stating that an approach beyond discounting, vouchering and limited price rises will be needed for sustainable growth in the year ahead.