UK shop prices fall at fastest pace since at least 2006: BRC

(C) Reuters. FILE PHOTO: The spread of the coronavirus disease (COVID-19) in Liverpool

LONDON (Reuters) – Prices in shops in Britain fell at the fastest pace since at least 2006 last month as retailers sought to find a way to win over shoppers hit by the coronavirus lockdown, an industry survey showed on Wednesday.

Shop prices fell by 2.4% in annual terms, following a 1.7% drop in April, the British Retail Consortium trade body and market research firm Nielsen said.

It was the biggest fall since the BRC records began in 2006.

Clothing and furniture saw the sharpest price drops while food prices increased slightly due to higher business costs, implementing social distancing measures and labour shortages in the industry.

“We expect to see continued upward pressure on food prices from the effects of the pandemic in the coming months, while non-food prices are likely to remain deflationary with subdued sales,” Helen Dickinson, the BRC’s chief executive, said.

Britain’s most closely watched inflation rate fell to 0.8% in April and could go negative soon, according to Bank of England Deputy Governor Ben Broadbent.

Britain has reopened outdoor markets and car showrooms and all other non-essential retail are set to follow suit from June 15 if the government’s social distancing requirements are met.