Black Friday has led to a drop in shop price increases in November, sparking hopes of a rebound in consumer confidence ahead of Christmas. However, the relief may be short-lived, with experts warning that the rise in employment costs next year will « likely filter through to prices ».
According to the British Retail Consortium (BRC) and market researchers NIQ, overall shop prices were 0.6% higher than a year ago last month, a drop from 1% in October. Food inflation also saw a slowdown, dropping to 3% from October’s 3.7%, as widespread promotions resulted in price rises easing, particularly in dairy, fruit, bread and cereals. However, inflation remained persistently high for oils and fats as well as meat and fish.
Helen Dickinson, BRC chief executive, said: « Black Friday deals began earlier than normal as competition between retailers hit fever pitch.
« With Budget uncertainty behind us, retailers are hoping that consumer confidence rebounds in this crucial trading period and they will continue doing everything they can to keep prices down and help customers’ money go further this Christmas. »
However, Ms Dickinson warned: « Headwinds in the new year include rising employment costs, which are likely to filter through to prices.
« This could shake already weak consumer confidence and present further challenges for consumers in the year ahead. »
Mike Watkins, head of retailer and business insight at NIQ, commented: « It’s good news for shoppers that price increases are slowing, but inflationary pressures still remain, in particular within food.
« The UK retail market is very competitive, so retailers will need to keep any price increases as low as possible in the run-up to Christmas, in order to entice shoppers to spend. »
