Shop prices plummet as retailers fight for business

9th Apr 2014 07:00

UK high street prices fell for the eleventh month in a row in March as retailers battled for business from cash-strapped shoppers, a survey out Wednesday showed.Overall shop prices dropped by 1.7% against a 1.4% fall in February, according to the March Shop Price Index from the British Retail Consortium (BRC) and researchers Nielsen.The dip was the deepest since the index began in December 2006, while food inflation slowed to 0.8% from 1.1% in February - the lowest on record, the BRC and Nielsen said.Strong industry-wide competition was driving the record-breaking run, as retailers scrap for a share of consumers' limited spending power, the BRC said.Tesco announced £200m of price cuts in February while Walmart-owned rival Asda, unveiled £1bn of reductions in the next five years, as supermarkets try to counter a challenge from discounters such as Aldi and Lidl.Economists have warned that the UK economic recovery will struggle to gain momentum until wage increases catch up with steeper rises in the cost of living.BRC Director-General Helen Dickinson said: "Retailers have been responding to their customers with keen prices and promotions to maintain market share."With food and drink representing 15% of disposable income for the least affluent third of households, retail's significant contribution to maintaining standards of living is clear."PW