A plunging oil price has dragged UK inflation to zero in recent months. But analysts say the fall in retail prices cannot be solely attributed to oil. Discount retailers continue to steal market share from established industry giants, taking an increased chunk of both food and non-food markets. As retail analyst Nick Bubb notes, “the big supermarkets have had to respond to this by bringing down their own rip-off prices”. The result is a sector-wide fall in prices paid at the till.

The growth of online retailers has also brought prices down, in part due to the ease with which customers can compare prices and purchase goods elsewhere if they find an item cheaper on a competitor’s site. Retailers are also reluctant to offer different prices in their physical and online stores, according to retail analyst Richard Hyman, which means shops are forced to cut prices on the high street. An ever-expanding range of shops is also to blame, according to Mr Hyman. “Overcapacity is the biggest of the issues affecting prices,” he says. “In the last 10 years, online alone has added the equivalent of 110 million square feet of trading space - that’s roughly equal to 65 additional Westfield London shopping malls. An increase in the supply of retailers, with no increase in demand, has left the industry massively oversupplied.”