Shop price inflation still riding high

06 Dec '07

2 min read

The British Retail Consortium reports Scotland's shop price inflation.

Year-on-Year:
For the second consecutive month shop price inflation in Scotland was 1.1% maintaining the highest level of inflation seen since the beginning of the survey in December 2005. Inflation in Scotland continues to be in line with the UK as a whole.

Month-on-Month:
Price inflation slowed in Scotland to 0.1% from October when price inflation was slightly higher at 0.2%. This slight deceleration in the inflation rate is the result of an increase in the amount of discounting and promotional activity taking place in non-food in the run up to the Christmas period.

Fiona Moriarty, Director, SRC comments:
“With consumers becoming more price conscious about making discretionary purchases, retailers have to discount in order to encourage spending, accelerating the level of deflation in non-food.

However, there is still pressure in food, where higher commodity inflation is still driving up prices, which the supermarkets are doing their best not to pass onto the consumer. In light of the severe slowdown in consumer spending that is likely after Christmas and the subsequent easing of shop price inflation, the next rate move should be a cut.”

Mike Watkins, Senior Manager, Retailer Services, Nielsen comments:
“Shop price inflation in Scotland has been accelerating in-line with the UK for the last 6 months but the index for Scotland still tracks below that of the UK as a whole and overall prices still remain a little lower. Nevertheless, the inflation in food continues to overshadow the discounting and promotional activity taking place in non-food “.

Scottish Retail Consortium

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