Shop price inflation reached its lowest level last month since November 2009, as it fell to 0.6% from 1.5% in December, according to the BRC-Nielsen Shop Price Index.
Food inflation dropped 0.1% to 4.1% in January while non-food prices dipped 1.4%.
British Retail Consortium (BRC) director general Helen Dickinson said the non-food prices drop, its most rapid since September 2009, was driven by clothing and electricals.
“Weak demand for clothing necessitated big price cuts. Clothing prices were down 7.7% on the year before, their biggest drop in the six years of this survey. But clothing suffered its worst sales fall since last Easter,” she said.
Dickinson said promotions were not as widespread as last year with a higher proportion of goods sold at full price. However, where discounts were applied, they were deeper.
Nielsen head of retailer and business insight Mike Watkins said: “With the traditional high street January Sales being replaced by year-round discounting, it’s no surprise to see a continuation of deflation in non-food, particularly in clothing and footwear where half-price reductions have been used to attract shoppers post-Christmas.”
The slight dip in food inflation reflected an easing of commodity costs filtering through along with better fresh food prices. Dickinson expects food inflation to remain stable as the year goes on.