There was some early Christmas cheer for consumers today, with festive prices poised to be at their lowest since 2013.

Shop prices dropped 1.7% during November, with non-food deflation accelerating to 2.3%, helped by the Black Friday discounting flurry.

However, the BRC-Nielsen data was caveated with a warning that inflation will emerge in the New Year.

While those two scenarios prevent obvious win-lose cases for shoppers, it is more difficult to see where retail’s victory is coming from.

Lower prices ahead of Christmas should spark an uplift in sales volumes, but lower margins may not result in increased profits.

And any hike in 2017 prices will need to be made cautiously to avoid alienating consumers, with businesses keen not to pass on all additional sourcing costs to the shelf edge.

So a splash too much brandy with the Christmas pudding may not be the only cause of headaches for retailers come New Year’s Day.

One retailer confident going into Christmas though is Fortnum & Mason, which posted a 27% spike in full-year profits today.

Yet there were contrasting fortunes for Topps Tiles, whose share price dropped 3.7% after revealing that it incorrectly posted a 0.8% uplift in like-for-likes during the first eight weeks of its new financial year.

Quote of the day 

“Recent claims that we have sought to prevent Iceland using the name ‘Iceland’ to promote tourism to the country are simply nonsensical”

– Iceland Foods founder and boss Malcolm Walker hits back at the Icelandic government, after the Nordic country insisted it would press ahead with plans to sue the frozen food specialist for use of its name.

Today in numbers

The net profit recorded by Fortnum & Mason during the year ending July 10.

Topps Tiles’ actual like-for-like sales figure during the first eight weeks of its financial year. It had previously incorrectly reported a 0.8% jump. 

Tomorrow’s agenda

With no major trading updates expected, all eyes will be on the latest BRC-KPMG Retail Sales Monitor as the sector seeks to guage the impact of this year’s Black Friday extravaganza.

Luke Tugby, deputy news editor