08/01/2009 - Retail prices show record fall
The last month of 2008 saw shop prices fall by the biggest margin in at least three years as consumers benefited from aggressive discounting and the VAT reduction.
Figures from the British Retail Consortium (BRC) Neilsen Shop Price Index show that shop prices fell 2% between November and December - the largest drop on record since the BRC began collecting data in this way in December 2005.
The fall, which was the fastest for two years, came as non-food prices were slashed heavily, falling by 2.7% month-on-month and by 2.4% compared with December 2007.
The BRC said that retailers trying to lure in cost-conscious consumers with pre-Christmas discounts left electricals, books and home entertainment all around 5% lower than last year.
Although shop price tags were lowered in part because of the Government's reduction in VAT from 17.5% to 15% at the beginning of December, the BRC said the figures highlighted the acceleration in pre-Christmas discounting.
Stephen Robertson, director general of the BRC, said: "Huge discounting by retailers, together with the VAT reduction, brought non-food prices down dramatically.
"Goods in every category were much cheaper - both compared with the previous month and a year ago."
Copyright © Press Association 2009
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