Cash in on falling prices

Published by Hannah Ricci on 09 July 2009.
Last updated on 23 August 2011

Falling prices

We have seldom been more aware of the cost of our shopping; in straitened times, a few pennies here and there can make a big difference to our monthly disposable income.

The good news is that prices are falling overall. Inflation - or the cost of living - peaked in September 2008, but has been falling since then to mid-2009.

So to help you save those vital pennies – and pounds – Moneywise has identified where you can cash in on falling prices, and which purchases you should put off until later.


European holidays

Amid the economic doom and gloom, it comes as a welcome surprise that a European get-away could be more affordable than you might have expected this summer. Falling airfares within the eurozone, coupled with lower local prices and the recent strengthening pound, have brought holidays to the Continent within reach once again.

Portugal’s Algarve makes a return to the top 10 affordable destinations in the Post Office Travel Services’ survey of annual holiday costs, for the first time in two years. A basket of goods in the region costs £67.08 – just 39p more than in Spain, the cheapest eurozone destination.

The Post Office survey, which adds up the cost of goods typically bought by holidaymakers, including drinks and meals, also found price drops in Greece and Italy.

And as the pound gains in value against the euro, Brits holidaying in Europe can expect to pay about 10% less than at the start of the year, according to the Post Office.

Find out how to make the most of your holiday money

White goods and TVs

Historically, electrical goods have fallen in price year-on-year as advances in technology have allowed manufacturers to produce gadgets more cheaply. Although this trend ground to a halt last year, average prices have begun to fall again.

The average plasma or LCD TV on comparison site now costs £796, compared with £833 in April 2008. Fridges also dropped by 22% in the 12 months to April, to an average of £466.

So if you’ve been putting off a purchase, it’s worth reconsidering. However, if you’re not in a big rush to buy, it may also be worth hanging on for a few months to see if prices will fall further.

Eating out

Many of us now see dining out as a luxury. So, in an attempt to lure customers through their doors again, many restaurants are offering great discounts on food and drink. Deals include two-for-one offers, a free bottle of wine with your meal, and discount menus – some up to 50%.

Check your local newspaper for deals at local restaurants, and websites for the bigger chains such as Giraffe, Café Rouge or Pizza Express. Other ways to cut the cost of eating out

Furniture and homeware

Furniture retailers have taken a battering since the credit crunch first hit. The downturn in the housing market has reduced the need to furnish new homes, while cash-strapped consumers are reining in non-essential purchases.

As a result, retailers are slashing prices to tempt customers to part with their cash. At the time of writing, some of the best offers included half-price sofas at DFS, 50% off at Habitat, and 30% off some ranges at Debenhams.

So if you’ve been holding back from purchasing something for your home because of the price, now is a great time to head to the shops.

Find out how to furnish your home without breaking the bank


Digital cameras

The weak pound throughout the past year caused considerable price hikes in some areas of consumer technology. Figures from show the average price of a digital camera increased to £414 in April 2009, compared with an average of £339 the same time last year.

With this in mind, you should try to put off buying digital gadgets. Prices will eventually start to fall again as the pound gradually begins to strengthen and retailers are forced to discount products due to a saturated market.


Walking down the high street in recent months you may have seen a few empty units or closing-down sales, but decent sales and discounts in popular clothing stores have been few and far between.

In fact, according to the government’s Office for National Statistics (ONS), clothing and footwear contributed to a large upward push in March’s inflation figures, with women’s outerwear topping the league.

Our tighter budgets also mean that many retailers, such as John Lewis and Next, reported a drop in annual sales in May. Cut-price clothing chain Primark is one of the few retailers to continue to prosper in the recession, reporting a 10% increase in profits in the six months to the beginning of March.

So it’s worth reining in any impulse fashion buys. However, if you have clothes that are genuinely coming to the end of their wearable lives, it may pay to replace them now – the price of cotton is on the up, and this could soon filter through to high-street clothing prices.

Find out you can save money by with swap shops

Toys and computer games

The recession has also encouraged families to spend more time at home, leading to an increase in the sale of toys, puzzles and games.

The ONS reports that the largest contributor to the rise in inflation this year has been recreation, with price rises in games, toys and hobbies, particularly computer games. reveals that the price of popular games and puzzles leapt to £38 in April, up from £12 in April 2008. So why not dust off the Scrabble and Trivial Pursuit instead?


There are, unfortunately, some huge price increases that we just have to grin and bear. A number of train operators, including First Great Western, East Midlands Trains and First Capital Connect, hiked some fares by up to 11% in May. The price rises apply to unregulated fares, which include off-peak travel, and railcards, which have risen from £20 to £25.

Annual rises on regulated fares, which include season tickets, are linked to inflation in July the previous year, which means they rose 6% in January but may well fall in January 2010. But

Gerry Doherty, a TSSA transport union spokesperson, warns: “Train companies have been told they cannot increase regulated fares next January, so they are increasing unregulated fares, off-peak and advance tickets instead.”

Utility prices also remain high. Although all of the big six energy providers have slashed electricity and/or gas prices during the first half of 2009, households are reeling from the massive hikes seen in 2008.

Robert Hammond, energy expert for Consumer Focus, says: “We expected much bigger reductions, given that wholesale gas and electricity prices are half of what they were at their peak last year.”

Cut the cost of your energy bills

And at the supermarket, a typical basket of 33 items costs nearly £10 more than a year ago, according to The Grocer magazine. While supermarkets are awash with discounts on non-essential foods, staples such as milk and rice have seen huge price rises – the cost of a loaf of bread has risen from £1.13 to £1.26 and chicken from £2.49 to £3.04, according to the ONS.

Relief is on the horizon, however: the British Retail Consortium (BRC) reported a 1% fall in food price inflation in April. “The worst of food price inflation may be over, thanks to a more stable pound,” says BRC director general Stephen Robertson.

But there are no price falls in the pipeline at the petrol pumps. The average price of unleaded petrol was 100.6p a litre as Moneywise went to press, while diesel crept up to103.9p.

The Budget did little to help drivers either. Following 2p duty rises in December 2008 and April 2009, the chancellor announced a further four increases starting in September 2009. These, coupled with the end of the VAT ‘holiday’ in December, will increase the cost of fuel for the average car by £65 a year, according to the RAC.

Get cheaper car insurance

Toys and computer games Furniture and homeware
Train journeys Eating out
Digital cameras White goods and televisions
Clothing European holidays


More About

Leave a comment