Weekly Retail & Leisure News - 05 December, 2016
Overall shop prices fell 1.7% in November, an unchanged rate of deflation from October, according to new figures from the BRC-Nielsen Shop Price Index. Food deflation slowed to 0.8% YoY compared with 1.2% in October. Helped by Black Friday promotions, non-food deflation increased to 2.3% from 2.1% in October. Prices for clothing and footwear in UK stores fell 7.1% YoY in November, indicating retailers are yet to pass on the higher cost of importing goods.
Revenues at UK shopping centres saw a 54% spike YoY across the Black Friday weekend despite footfall falling on the day itself. Whilst high street footfall decreased overall, the London West End enjoyed a boost as footfall edged up 3% on last year over the four-day weekend. Black Friday also fuelled positive retailer figures, with John Lewis coming out as a big winner. The retailer's sales rose 6.5% in the week to November 26 to £200m, marking the department store's strongest ever week.
Looking forward, the continued deflation means this year's Christmas shop will be more than 5% lower that it was three years ago, according to the BRC-Nielsen Shop Price Index. Indeed, a recent PwC survey of UK shoppers has indicated that the weakening of the pound and the political uncertainty following the vote to leave the EU is likely to have no impact on shopping habits and Christmas spending plans this year. Mike Watkins, at Nielsen, noted that "shop prices are still falling and deflation will continue to at least the end of the year as the result of the battle for the wallet of Christmas shoppers." However, he also warned "looking ahead, we can expect a slow return to shop price inflation during 2017."
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Director, Head of Retail Research (UK & EMEA)
+44 (0)20 3147 1155
Director, Head of UK Retail & Leisure
+44 (0)20 7318 7838
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