Coronavirus clearance sales drive UK retail prices down sharply
Jun 3, 2020
The regular monthly shop prices reports we see don't make for the most exciting reading in ‘normal’ times with their tiny shifts up or down each time. But we’re living in far from normal times and the latest report shows UK retail prices falling at their fastest pace in 14 years as a result of the coronavirus crisis.
This is in spite of the fact that prices of some goods have risen due to extra demand and limited availability. What’s driven the overall fall in The British Retail Consortium (BRC) and Nielsen report is promotional pricing as fashion and furniture retailers in particular slashed prices in order to attract uninterested shoppers.
Shop prices during May fell 2.4% on top of a 1.7% decline in April. Those figures might not be huge, but if they were replicated across the entire year they would add up to a massive plunge in prices overall.
The price cuts in May came as UK consumers were not only unable to visit the shops during the month but also failed to turn to online shopping in large enough numbers to make up for sales lost through shop closures. It meant retailers were forced to make drastic price cuts in order to lure consumers to their webstores.
The extent of the price falls in certain sectors was made clearer by the fact that with food excluded, prices fell by 4.6% after a 3.7% drop in April.
And prices in June are also expected to be low as shops reopen, with many planning mega clearance sales.
Helen Dickinson, chief executive of the BRC, said: “Many retailers will have to fight to survive, especially with the added costs of social distancing measures. Government support remains essential, both to rebuild consumer confidence and to support the thousands of firms and millions of jobs that rely on it.”
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