According to the British Retail Consortium (BRC), shop price inflation in the UK remained steady in December. Annual inflation for shop prices held at 4.3% last month, which is slightly below the three-month average of 4.6%. However, there were variations within different sectors. The non-food sector saw prices continue to rise, while food prices experienced their eighth consecutive month of decline. This indicates that overall store price growth is at its lowest level since June 2022, with inflation at its lowest since September 2022, as highlighted by the BRC.

The decline in food inflation can be attributed to retailers’ efforts to lower prices in preparation for the Christmas season. On the other hand, non-food inflation increased to 3.1% in December, up from 2.5% in November, surpassing the three-month average rate of 3%. Helen Dickinson, Chief Executive of the BRC, mentioned that the non-food sector faced challenges in December, as price inflation rose following retailers’ investment in Black Friday discounts in November and ahead of the January sales.

Dickinson also emphasized that retailers will continue to make efforts to keep prices down in 2024, but there are obstacles on the horizon. These include new border checks for EU imports and increased business rates bills starting from April, which could hinder crucial investment in local communities and potentially lead to higher prices for struggling households. Mike Watkins, Head of Retailer and Business Insight at NielsenIQ, added that there is significant pressure on discretionary spending, resulting in deeper price discounting in both the non-food and food retail sectors.

In conclusion, shop price inflation in the UK remained stable in December, with food prices experiencing a decline and non-food prices increasing. Retailers are expected to persist in their attempts to lower prices, although challenges such as new costs and border checks may impact their ability to do so. It is crucial for the government to carefully consider the potential negative consequences on local communities and households before imposing additional costs on retail businesses.

For more information on UK shop price inflation, you can refer to the British Retail Consortium’s official website. Additionally, The Guardian has published an informative article on the challenges facing UK retailers amidst rising inflation, which can be accessed through this link.