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Shop prices ‘the same as last Christmas’, figures show

Shops along Edinburgh's Princes Street as retailers gear up ahead of Black Friday. PRESS ASSOCIATION Photo. Picture date: Wednesday November 23, 2016. Photo credit should read: Jane Barlow/PA Wire

Shops along Edinburgh's Princes Street as retailers gear up ahead of Black Friday. PRESS ASSOCIATION Photo. Picture date: Wednesday November 23, 2016. Photo credit should read: Jane Barlow/PA Wire

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Shop prices are almost unchanged from last Christmas in good news for consumers but a continuation of difficult conditions for struggling retailers, figures show.

Overall prices were 0.1% higher in November compared with a year ago, making it just the third month of inflation in five years, according to the BRC-Nielsen Shop Price Index.

Food inflation accelerated to 1.6% this month from 1.3% in October, partly due to higher global cereal prices pushing up on the prices of several products.

However the British Retail Consortium (BRC) said global food prices as a whole were falling and it did not expect sustained upward pressure on inflation.

The BRC said significant reductions in some categories, particularly clothes and electricals, did not reflect Black Friday deals with the sales event taking place after it collected its data.

BRC chief executive Helen Dickinson said: “As we approach the Christmas season, the good news for consumers is that prices have remained almost unchanged in November.

“Furthermore, falls in the price of clothes and electrical goods will be a welcome bonus as the public prepare to do their Christmas present shopping.

“However, the low inflation presents a more difficult picture for retailers who are facing weak consumer demand and uncertainty surrounding Brexit.

“If the government wishes to rebuild business confidence, they must work fast to ensure we get a transition period that gives retailers and their suppliers time to adapt to business outside the EU.”

Mike Watkins, head of retailer and business insight at Nielsen, added: “With the recent slowdown in sales growth across food retailing and the start of seasonal advertising, we can expect further price cuts as the battle for shopper loyalty this Christmas begins to heat up.”

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