British retail stores saw product prices decline 1% year-on-year in February, according to the latest Shop Price Index published on Wednesday by the British Retail Consortium (BRC).
This follows a 1.7% decline seen in shop prices in January. Helen Dickinson, CEO at the trade association said that the current reading marked the continuation of "a trend of year-on-year price falls that has lasted nearly four years."
The index, which measures price changes in popular retail outlets in the UK, also threw light on change seen in food and non-food prices. The consortium said food prices increased 0.4% last month. With regards to price changes in fresh food and ambient food - those that have a larger shelf-life - the group said the former saw a 0.1% on-year increase, while the latter saw a 0.8% increase.
Commenting on the trend, Dickinson said, "Food prices were on average 16 per cent higher at the beginning of this year compared to last, whilst over the same period the value of the pound fell around 15 per cent. Despite this, February saw an increase of just 0.4 per cent in the prices of food sold in shops; proving retailers' resilience in managing to largely shield consumers from cost increases."
With regards to non-food items, the consortium said prices had declined 1.8% on-year in February, an improvement over January's 2.3% decline.
Dickinson said that while consumers continued to benefit from this fall for the time being, easing could continue going forward. "However, the rate of deflation has eased considerably from a monthly perspective, which can be explained in part by an end to the promotional activity in January, after a weak festive sales performance in some non- food categories," Dickinson said.
"Looking further ahead, retailers, who operate in a highly competitive market with narrow margins, will be increasingly hard pushed to protect their customers from the inevitable impact of these rising cost pressures. We can therefore expect this impact to start manifesting in shop prices over the course of the year," Dickinson added.