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Discounts saw December prices slide

Shop prices slid deeper into deflationary territory in December, falling 0.6% on 2016 compared to the 0.1% decline in November, according to latest figures from the British Retail Consortium and Nielsen.

This is the deepest deflation since March 2017.

The BRC Nielsen Shop Price Index also revealed that non-food prices fell at their fastest rate since January 2017, declining 2.1% year-on-year compared to 1.1% in November.

Food inflation gathered steam, however, with inflation increasing to 1.8% in December, up from 1.5% in November. Fresh food inflation picked up, increasing to 2.0%, a significant increase on November’s 1.3% rate.

“After several months of shop prices teetering on the edge of inflation, December saw them retreat deeper into deflationary territory. Prices in December fell at the fastest rate since March this year when only last month we saw the shallowest rate of deflation for four years, said Helen Dickinson OBE, chief executive at the British Retail Consortium.

“This is good news for shoppers. Retailers offered lower prices at the beginning of December than last year on many of their non-food ranges, providing welcome options for Christmas shoppers on a stretched budget. These discounts allowed consumers some much needed breathing room during the festive period at a time when the cost of their food shop is on the rise.

“Food inflation picked-up pace this month, fuelled by climbing global food prices earlier in the year. While retailers will continue to do their best to absorb cost increases for their customers, the challenges to the industry remain stark with more inflationary pressures in the pipeline.

“Therefore, this year we will continue to press the Government for clarity on the principles and terms around the Brexit transitional arrangements, to ensure businesses have the certainty to plan and invest and that consumers don’t face higher costs or delays from tariffs or onerous customs barriers.”

Mike Watkins, Head of Retailer and Business Insight at Nielsen added: “The SPI inflation rate is below other inflationary measures, showing there is little inflationary pressure coming from retailers. With consumer confidence wavering and unpredictable levels of demand, many non-food retailers have been keeping prices low to stimulate spending, which will undoubtedly have come at a cost to margins.  Whilst food prices have edged up a little due to supply chain increases in fresh and seasonal foods, pricing across Supermarkets will remain competitive as we start 2018 with consumers still coping with higher household bills.”


BRC warns of gaps on shelves post Brexit

Trade association the British Retail Consortium has warned that Brexit brings the possibility of food shortages if the UK does not resolve issues around customs processes.

The report by BRC claims that the choice and availability of affordable, quality products for consumers is at risk without additional agreements and investment to supplement a customs deal. It added that significant investment in ports, roads and transport infrastructure needs to be in place when Brexit happens, and that agreements must also be signed to prevent goods being held up at ports and docks through red tape.

The BRC also stated that European supply chains are a key part to delivering the goods into the UK.

“A strong deal on customs is absolutely essential to deliver a fair Brexit for consumers,” commented Helen Dickinson OBE, chief executive of the BRC.

“Whilst the Government has acknowledged the need to avoid a cliff-edge after Brexit day, a customs union in itself won’t solve the problem of delays at ports. So, to ensure supply chains are not disrupted and goods continue to reach the shelves, agreements on security, transit, haulage, drivers, VAT and other checks will be required to get systems ready for March 2019.

“We want to work with the Government to develop a system which works for consumers, so that there’s no difference in terms of the availability of affordable, quality products when they make purchases or visit stores post-Brexit. We believe our recommendations will help to achieve that and enable our world-leading retail industry to continue serving customers and contribute to the growth of the UK economy.”

Lush image MICROSITE

Lush staff to make German move in light of Brexit vote…

According to a number of reports, the Brexit vote has prompted the UK handmade cosmetics retailer, Lush, to move its staff to Germany following the possibility of an uncertain future following the Brexit vote.

With the company claiming to have expanded production at its Dusseldorf factory for the European market, Lush initially announced the relocation plans back in June; saying it would look at safeguarding all sales, multinational workforce and production by moving these operations to the continent.

A spokesperson for Lush said in a statement: “While this was always the plan – to make products for Europe in Europe (alongside our Croatian factory) – the reality of the Brexit vote has meant we have done it with a bullet. Many of our staff still have uncertainties about what the Brexit deal will mean for them and continue to wait anxiously for this to be revealed.”

Nine staff members have already made the move to Dusseldorf, and a further nine are expected follow suit in the near future.

Wallet Circle MICROSITE

Industry Spotlight: Free loyalty app service for ‘Brexit-threatened’ retail and restaurant businesses…

Actively progressing with its future in the competitive field of mobile consumer technology after raising £190,000 via angel investors to develop its ‘proximity engagement’ technology, the mobile start-up, Wallet Circle, is redefining its business model post-Brexit; inviting retail businesses of all sizes to join its loyalty app free of charge.

The company, which was founded in 2014 and has an estimated 100 retail customers ranging from The Savanna to Whitworth Pharmacy, has announced it will set up a customised mobile loyalty card and supply an iBeacon – acting as a digital version of an ink-stamp – together with business cards and flyers for free and is eligible to all retail, restaurant and café businesses in the UK.

Co-founder of Wallet Circle, Manas Abichandani, commented: “Wallet Circle is adapting to the changing economic times. We understand that businesses both big and small have become more cautious and will only invest in new technology when there is a definite ROI. In response, we have decided to let businesses join our loyalty app for free so they can grow their user base with no risk and no obligation.”

He continued: “Only once they see lots of their customers using Wallet Circle’s app, and believe in its potential, they can choose to upgrade to our premium tier, which starts from £25 a month, to help them engage with these users.”

Nonetheless, Abichandani expressed that retailers should not feel required to sign up to the premium service: “We obviously hope that retailers will recognise the value of customer insight and the means to act upon it but we will not force retailers to upgrade. Regardless, as a paperless loyalty card, businesses can make tangible savings on design and print as well as doing their bit for the environment.”

According to the company, this new approach has generated substantial traction and is attracting new business customers weekly, including restaurant and café chain Benugo, which is said to be trialing Wallet Circle’s app to provide loyalty cards in its London outlets.

Wallet Circle is currently available via the app store for iPhone and Android.


To get started with Wallet Circle, click here