UK shop prices fall

Big reductions in ladieswear exerted downward pressure

Fierce competition in the UK retail sector is keeping shop prices down.

Prices in July were at their lowest level since the January sales, according to the British Retail Consortium.

We are seeing strong price competition between retailers on a range of goods - customers are the main beneficiaries

British Retail Consortium

Its monthly shop price index showed a 0.5% reduction compared with July last year, and a 1.2% fall compared with 1998.

Compared with June, prices fell by 0.4% last month, as the summer sales got into full swing.

Ladieswear saw particularly deep discounts, although food prices edged up slightly because of seasonal factors, such as a rise in the price of potatoes.

Overall, the BRC said, prices were at their lowest level for six months.

Competition

Bill Moyes, BRC director general, said: "These figures demonstrate the degree of competitiveness in the retail sector.

"We are seeing strong price competition between retailers on a range of goods. Customers are the main beneficiaries of the resulting price deflation."

The BRC also said that the total number of employees in the retail industry grew by 9.2% in the second quarter from a year earlier.

This compared with a 4.8% growth rate in same period in 1999.

The index samples the prices of 200 of the most commonly bought items in a representative sample of the most popular stores.