January’s Price Pulse: A Quick Take
Shop‑Price Deflation – Still Shrinking
In January, shop price deflation dropped to 0.7%, a slight lift from the 1.0% decline seen in December. It sits just above the 3‑month average of -0.8%, meaning stores have been easing some price cuts.
Non‑Food Aches – Slightly Less Depressed
Non‑food items linger in the red at -1.8% for the month, easing from -2.4% a month earlier. That’s a tiny improvement over the 3‑month average of -2.0%.
Food Increases – A Bumpy Ride
- Overall food prices nudged up to 1.6% in January, down from 1.8% in December, but still shy of the 1.8% average.
- Fresh food was gentler at 0.9% versus 1.2% in December, slightly under the average of 1.1%.
- Ambient food slowed to 2.5%, dropping from 2.8% in December, below the 2.7% average and the lowest rate since Feb 2022.
- All these bumps mean the annual food inflation has eased noticeably since early 2024.
Industry Voices That Matter
Helen Dickinson – BRC CIO
“Even though overall prices fell in January, the speed of shop price deflation is slowing,” Dickinson says. “Big sales in January meant bargain lovers found good deals—think furniture and fashion—yet retailers are feeling the sting of surplus stock. Food prices are already start‑moving up the fastest pace since April last year, and ambient food saw a 1% jump due to sugary treats, chocolates, and booze. These price slides won’t last long; the £7bn cost shock from the last Budget—higher NICs, a new packaging levy and the National Living Wage hike—will push prices up. The Government’s business rate reforms need to keep shop owners from paying more; otherwise, UK households will feel it.”
Mike Watkins – NielsenIQ Retail & Business Insight Head
“Consumers are still skeptical about spending and seeing their household incomes squeeze tighter,” Watkins observes. “Non‑food retailers will keep offering price cuts and food stores will follow. Shoppers are still budgeting wisely, hunting for the best bargains wherever they can find them.”
What’s Next?
Keep an eye on upcoming price trends: the deflation shows a gentle wobble, while food keeps climbing a bit. If retail cost eyes stay high, your shopping budget will be under more pressure than ever—and that’s something the government will need to address strategically.
