Shop prices dropped at their fastest rate for seven years in December as retailers attempted to woo customers with heavy discounts over the Christmas period.

The British Retail Consortium’s shop price index, compiled with market research firm Nielsen, fell 0.8% on last year. The decline marks the biggest drop since the index was set up in 2006.

Non-food prices dropped 2.3% while food prices increased by 1.7%.

Across the categories, clothing and footwear saw the heaviest discounting, with prices falling 9.9% compared to last year. Prices of electricals were down 3.5%, furniture and floorcovering slipped 1.7% while books, stationery and home entertainment was also down 1.4%. Health and beauty actually saw prices rise 1.2% while DIY, gardening and hardware nudged up 0.3%.

The index also found that food inflation slowed to 1.7% from 2.3% in November.

Helen Dickinson, director general of the British Retail Consortium, said the fall in non-food prices in December reflected the widespread promotional activity as retailers competed for all-important Christmas custom. 

“Many categories remained deflationary, while prices fell for books, entertainment and home improvement products to attract shoppers preparing for the festive break. It’s also worth noting that ‘Cyber Monday’ fell in the period covered by the index, so discounting was particularly commonplace, with many retailers offering to match or beat offers found elsewhere.”