Shop price increases ease amid hopes of Christmas boost to consumer confidence

Black Friday drove an easing of shop price increases in November amid hopes that consumer confidence will rebound in the final weeks before Christmas.

Overall shop prices were 0.6% higher than a year ago last month, down from 1% in October, according to the British Retail Consortium (BRC) and market researchers NIQ.

Food inflation also slowed, to 3% from October’s 3.7%, as widespread promotions meant price rises eased especially in dairy, fruit, bread and cereals.

However, inflation remained stubbornly high for oils and fats as well as meat and fish.

BRC chief executive Helen Dickinson 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, said: “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.”