BRC: Festive period benefited from lower inflation but price pressures on the horizon

New figures from the British Retail Consortium (BRC) and NielsenIQ showed that over the course of December, shoppers benefited from lower inflation. Yet, price pressures are anticipated for the coming year.

Over the period December 1 to 7, 2024, shop price deflation was at 1 percent, up from deflation of 0.6 percent in the month prior. This came above the three-month average rate of -0.8 percent. Shop price annual growth, meanwhile, remained at its lowest rate since August 2021, the BRC noted.

While food inflation remained unchanged at 1.8 percent, non-food stayed in deflation at -2.4 percent in December, down from -1.8 percent in November. This was below the three-month average of -2.1 percent.

The BRC did note that due to Black Friday coming later, with the discount event having already passed by December 2023, non-food prices were likely to appear more deflationary than the underlying trend.

In the report, head of retailer and business insight at NielsenIQ, Mike Watkins, said: “During December, shoppers benefited from both lower inflation than last year and bigger discounts as both food and non-food retailers were keen to drive sales after a slow start to the quarter.

“However, higher household costs are unlikely to dissipate anytime soon so retailers will need to carefully manage any inflationary pressure in the months ahead.”

Concern now moves to the incoming shifts from the Budget, which will see an increase in national insurance, national living wage and new packaging levies, meaning “there is little hope of prices going anywhere but up”, BRC CEO, Helen Dickinson said.