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New figures reveal deflation here to stay

Shopping surge expected as prices plunge to record low

GyleRetailers are hoping that shoppers will be drawn back into the high street after fierce discounting helped force prices in Britain’s stores to a new record low.

Promotions and cut-price bargains contributed to a 24th consecutive month of falling prices and with inflation now at zero consumers are finding their budgets going further.

BRC Director General, Helen Dickinson, said consumer confidence has soared to a near 13-year high and retailers will hope that this translated into shoppers splashing the cash over the Easter weekend.

“With strong consumer confidence and relatively benign macro-economic conditions we can expect the nation to respond with their feet or with a mouse click in the coming weeks,” she said.

Mike Watkins, Head of Retailer and Business Insight, Nielsen, said: “Prices continue to fall across the retail industry and deflation is likely to be with us for the near future, which means shoppers are going to be able to stretch their budgets further when shopping in store or online.

“The implication for food retailers is that this may help sustain the slowly improving sales volumes we have seen in recent weeks, and also encourage consumers to spend some of their savings on affordable indulgences.”

David Lonsdale, director of the Scottish Retail Consortium, added: “Scottish households are benefitting from falling shop prices and a corresponding increase in their spending power, and retailers will be keen to capitalise on this opportunity.

“The fact that food price inflation is at a record low will be especially welcome to low income households who typically spend proportionally more of their family budget on groceries.”

 

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