The British Retail Consortium had said that retailers that resort to using deep discounts to attract cash-strapped consumers has lead to prices in British shops falling at their fastest pace in seven years.
Over the Christmas period, retailers battled to gain more customers with high discounts on clothing, furniture and electricals.
Paul Rossington, retail analyst at HSBC, said: “Lower achieved sales in September to November led to an increase in inventories at the sector level, and a resulting increase in sector discount activity from early December, with many retailers offering 30pc to 50pc price cuts from the outset.
“This has been compounded in our view by a structural increase in promotional activity at the sector level, led by the introduction of US-style promotional campaigns – eg Cyber Monday, Black Friday – and an increase in rapidly expanding value-led offers like Primark.”
The British Retail Consortium said the price of food, books, entertainment and home improvement products had also declined as well as the price of clothing falling.
Mike Watkins, head of retail and business insight at Nielsen, said: “With food inflation slowing in December, this will have brought a festive cheer to shoppers filling their trolleys with food and drink at supermarkets, especially as Christmas fell later this year.
“With the continuation of price cuts and promotions across all of retailing and with many shoppers holding back on shopping to the last week, there will have been bargains and some great savings for the savvy Christmas shopper.”
