LONDON (Reuters) – British retailers reported the biggest annual fall in prices since May this month, adding to signs of pressure on the region as non-essential stores had to close to the public from January 5 as part of renewed COVID locking measures.
The British Retail Consortium, a trading group, said on Wednesday that its members saw average prices fall 2.2% in January compared with a year earlier, the largest such fall since the depths of the first British lock in May.
Food prices rose 0.2%, the smallest increase since January 2017, while non-food prices fell 3.6%.
“Post-Christmas sales and the national lockout reduced non-food prices – particularly for clothing and DIY products,” said BRC chief executive Helen Dickinson.
Britain’s official measure of consumer price inflation, which covers a wider range of goods and services, showed an annual price increase of 0.6% in December.
Dickinson said that in addition to meeting softer consumer demand, retailers were under pressure from higher costs that they may not be able to accept.
“Red tape associated with Brexit, rising global shipping costs and food prices, as well as the pressure of emergency closures and restrictions for many retail businesses, mean that price pressures are rising,” she said.
New locking measures to counter an increase in COVID-19 cases and fatalities have added to the usual post-Christmas belt tightening by British consumers.
Experimental data last week from the Office for National Statistics, which has not changed seasonally, showed a 35% fall in consumer spending in early January, and the Confederation of British Industry reported the weakest sales volume since May.
Reporting by David Milliken, edited by Andy Bruce