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By David Milliken
LONDON, Jan 8 (Reuters) - British high street stores offeredtheir biggest pre-Christmas discounts in at least seven yearslast month, industry figures showed on Wednesday, highlightingtough trading conditions despite an improving economy.
The British Retail Consortium said shop prices in earlyDecember were 0.8 percent lower than the same time in 2012, thebiggest annual decline in any single month since the surveystarted in 2006 and the eighth consecutive month of fallingprices.
The price slide reflects widespread discounting by Britishretailers in the run-up to Christmas. Although Britain's economygrew strongly in the first nine months of 2013, wages havestagnated and households have had to fund higher spending bycutting saving.
Research in mid-December by accountants PwC found almostthree quarters of high street retailers had started sales orwere advertising promotions in their shop window, such asthree-for-two offers. It said average price discounts beingadvertised were 46 percent.
Major high-street clothing retailers Debenhams,Marks & Spencer, Gap and French Connection heavily promoted pre-Christmas price cuts.
Only a few UK clothing retailers, such as Next andSuperGroup, which have longstanding policies of notgoing on sale before Christmas, refrained from price cuts.
The BRC data showed that clothing prices in December were 10percent lower than a year earlier.
The BRC's measure of shop price inflation does not includeonline retailers or costs such as energy, transport and housing,which feed into the broader official consumer price inflation(CPI) measure targeted by the Bank of England.
CPI has fallen sharply in recent months and touched afour-year low of 2.1 percent in November, but consumer pricesare still rising more than twice as fast as wages - leading toclaims of a 'cost of living crisis' from the opposition LabourParty.
The BRC said non-food prices fell by an annual 2.3 percentin December, just short of October's hefty 2.4 percent drop,while food prices rose by just 1.7 percent, their smallestincrease since June 2010.
British retailers have reported a mixed Christmas in termsof sales, with some of the strongest performers being storessuch as Next which did not discount.
The BRC publishes the first comprehensive Christmas salesdata for the retail sector on Friday.
