LONDON Feb 5 British retailers slashed prices
at the fastest rate in at least seven years during the January
sales, industry figures showed on Wednesday, highlighting tough
trading conditions despite an improving economy.
The British Retail Consortium said shop prices in early
January were 1.0 percent lower than at the same time in 2012,
the biggest annual decline in any month since the survey started
in 2006 and the ninth consecutive month of falling prices.
The price slide deepened from 0.8 percent in December,
reflecting widespread discounting by British retailers in sales
- and particularly among clothing, furniture and electrical
Although Britain's economy grew 1.9 percent last year, the
fastest rate since 2007, wages have stagnated and households
have had to fund higher spending by cutting saving.
Still, sales have been buoyant.
Official data showed British retailers had the fastest
annual sales growth in more than nine years in December, fuelled
by smaller stores as some major chains reported a difficult
Christmas holiday period.
Tesco and Marks & Spencer, some of the
biggest names in British retail, posted heavy falls in sales in
the run up to Christmas, although fashion chain Next
enjoyed strong sales.
"January is always a key month for sales and promotions but
discounts have been deeper and more widespread than last year
and we are seeing this trend continuing," said Helen Dickinson,
the BRC's director general.
"Hard-pressed families will also have benefited from the
lowest levels of food inflation in almost four years."
The BRC's measure of shop price inflation does not include
online retailers or costs such as energy, transport and housing,
which feed into the broader official consumer price inflation
(CPI) measure targeted by the Bank of England.
The CPI has fallen sharply in recent months and hit the
BoE's 2.0 percent target in December for the first time since
2009. But consumer prices are still rising much faster than
wages, leading to accusations of a "cost of living crisis" from
the opposition Labour party.
The BRC said non-food prices fell by an annual 2.7 percent
in January compared with 2.3 percent in December, while food
prices rose 1.5 percent, down from the previous month's 1.7
The BRC publishes the first comprehensive January sales data
for the retail sector next Tuesday.