Down 3.6 per cent on 2007, however, signs emerge impending slowdown

Electricals lead price deflation

Electricals have continued to lead price deflation in the UK continuing the trend seen since December 2006, according to the latest figures from the British Retail Consortium.

Prices fell 3.6 per cent during May compared with the same time last year. That was in stark contrast with the rest of the non-food sector, which only saw a fall of 0.1 per cent. Only clothing and footwear came close, seeing a fall of 2.5 per cent during the same period.

Senior manager for retailer services at Nielsen Mike Watkins, which compiled the figures, said: "For non-food retailers demand has already weakened and prices have to remain competitive in order to maintain sales."

However, there are signs that deflation is slowing within the electrical sector. While prices were down 3.6 per cent in May, it was still lower than the 4.6 per cent decline seen in April.

Despite that, Watkins warned that falling demand could result in further price cuts. "This could mean summer discounting sooner, rather than later."

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