RETAIL DROP: January's sales saw deep discounts, data reveals
By Simon Hacker | 29th January 2025
JIttery shoppers and anxious retailers in Gloucestershire saw prices for everyday items drop in January as part of a decline which has been tracked for the last three months, according to new data from the British Retail Consortium (BRC).
Amid a warning that the squeeze on incomes is not letting up, shop price deflation emerged for the month at minus 0.7%, which was above deflation of -1.0% in the previous month - and slightly above the three-month average rate of -0.8%.

Deflation in non-food transactions was recorded at minus 1.8%, in January and this was an increase from -2.4% in the preceding month – the latter, in turn, being slightly above the three-month average rate of -2.0%.
So what does the data, compiled by NielsenIQ for BRC, tell us? On a macro level, the result in any general decline in prices for goods and services spells a contraction in the supply of money and credit in the economy. Closer to home, it amounts to less cash in the till - and ever-tighter margins, a scenario which can spell immediate existential threat for small and independent retailers. For this reason, the BRC is now increasing the volume on its call for business rates to be left untouched in 2025.

In food, the BRC said inflation eased to 1.6% in January, down from 1.8% in the month preceding. This is below the three-month average rate of 1.8%, the BRC said, while the annual rate has eased "considerably" since the start of 2024.
Digging into that detail, fresh food inflation slowed in January, at 0.9%, down from 1.2% in December 2024. This is slightly below the three-month average rate of 1.1%, while ambient Food inflation edged down to 2.5% in January, from 2.8% in December. This, too, is below the 3-month average rate (2.7%) and remained at its lowest since February 2022.
Helen Dickinson, Chief Executive of the BRC, said: "While overall prices fell in January, the pace of shop price deflation eased. Extensive January sales was good news for bargain hunters, with non-food products showing significant discounts, particularly for furniture and fashion, but less good news for retailers needing to shift excess stock."
She added: "This month's figures also showed early signs of what is to come, with month on month food prices rising at their fastest pace since April last year. Ambient food saw a 1% jump as prices spiked for sugary products, chocolates and alcohol."

With retailers soon feeling the full impact of £7bn of new costs announced at the last budget, she added that price cuts and deflation may not last much longer: "Higher employer NICs, increased National Living Wage, and a new packaging levy mean that prices are expected to rise across the board.
"Government can help to mitigate the impact on consumers by ensuring its proposed reforms to business rates do not result in any store paying more in rates than they already do. Without action, UK households will feel the effects."
Mike Watkins, Head of Retailer and Business Insight, NielsenIQ, added: "Shoppers continue to be unsure about spending and many are seeing a continued squeeze on their household incomes. So we expect non-food retailers to still promote and food retailers to still offer price cuts over the next few weeks, with shoppers managing their budgets by shopping smart and shopping around for wherever the savings are the most attractive."
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