British retailers cut prices as household incomes stagnate

British retailers slashed prices at the fastest rate in at least seven years during the January sales, industry figures showed on Wednesday, highlighting tough trading conditions despite an improving economy.

The British Retail Consortium said shop prices early last month were 1 per cent lower than at the same time last year, the biggest annual decline in any month since the survey started in 2006 and the ninth consecutive month of falling prices.

The price slide deepened from 0.8 per cent in December, reflecting widespread discounting by British retailers in sales – and particularly among clothing, furniture and electrical retailers.

Although Britain’s economy grew 1.9 per cent last year, the fastest rate since 2007, wages have stagnated, and households have had to fund higher spending by cutting saving.

Still, sales have been buoyant.

Official data showed British retailers had the fastest annual sales growth in more than nine years in December, fuelled by smaller stores, as some major chains reported a difficult Christmas holiday period.