The British exit of the European Union is the most significant economic demerger between major economies since the Second World War and much about the forthcoming process of transitioning out of the EU has no precedent. But we know already that both the UK and the EU will be significantly changed by what is about to unfold.
According to a trade association British Retail Consortium, this September we may observe the decline in the cost of goods in British stores because the nation’s retailers cut prices in the face of stiff competition and decline in consumers’ earnings.
Meanwhile Britain is facing falling in shop prices, a tendency characterizig last months.
It has already become the fourth month showing falling shop prices in the U.K., with the rate of decline gathering pace in recent months.
“With business costs continuing to rise–including business rates, wage bills, and pension costs – the high street risks more big name closures.” Helen Dickinson, chief executive, British Retail Consortium
Overall, shop prices were 0.6% lower last month than in September 2018, according to data collected by the BRC and market research group Nielsen. That represents a faster rate of decline than in August, when prices fell 0.4%.
Non-food goods prices fell 1.7% in September, while food inflation reached a rate of 1.1%. In particular, fresh food inflation reduced drastically, to a rate of 0.7%, half the 1.4% growth rate seen in August. Price inflation of food items with a long shelf life, or ‘ambient food’, slowed to 1.7%.
According to Mike Watkins, head of retailer and business insight at Nielsen, “Prices have fallen in nonfoods helped by seasonal reductions and many food retailers have introduced price cuts to help regain momentum after a challenging summer”.
Helen Dickinson, chief executive of the BRC, warned that while consumers might welcome lower prices, it would mean further pressure on the already tight margins of U.K.’s retailers.
“With business costs continuing to rise-including business rates, wage bills, and pension costs-the high street risks more big name closures,” she warned.