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  • Writer's pictureAllan

Earless, fearless and peerless

A lot of talk this week, and no doubt more to come, about the improving picture for UK inflation. While a drop in the headline CPI figure (albeit very slim) is pretty welcome for most households and businesses, a glance at the RPI chart attached here shows that any talk of deflation in some quarters of UK retail grocery is premature.

Premature but not surprising. Retail buyers are peerless in their earlessness when approached for price recovery, and fearless when any sign of easing price pressure emerges. Frustrating it might be. Infuriating even. But can they really be blamed for asking?

In the years prior to the Brexit referendum we actually had a period of real deflation in the UK. You can see it on the chart where some of the lines turn downward around 2014. I can recall seeing many suppliers, summoned for deflation talks, in hotel foyers preparing for their shakedown meetings. They, like me, were working out how far to resist or concede, and how to stay engaged and on sale. Just like every other year. The agenda details might be different – price recovery, promotional investment, terms or whatever else, but the negotiations never stand still.

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