TalkTalk Digital RPI quarterly index shows online inflation decreasing as High Street inflation rises

August 14th – Displaying goods in a showroom can almost double their price according to a new study published today by TalkTalk. The research tracks the price disparity between products bought online and on the high street, found that toys and white goods such as cookers and washing machines are the categories that command the biggest retail mark up with one Hotpoint Double Electric cooker costing £500 in store but just £364 online1.

The biggest price disparity found was for toys, where the average mark up for shopping on the high street compared to online* was around 97 per cent. A Lego City Big Truck toy costs £33.99 from one high street store, but is only £13.99 online, a saving of £202. A Vtech Kidizoom Twist Digital Camera will set you back £49.99 from a bricks-and-mortar toy retailer or just £35.99 online3.

The revelations coincide with the publication of TalkTalk’s quarterly Digital Retail Price Index (DRPI), compiled by researchers at the Centre for Economics and Business Research, which tracks the rate of inflation of goods purchased online against a comparable basket of goods bought in-store. The research found that DRPI inflation has fallen to -0.7%, its lowest level for almost five years. In contrast, the in-store price comparator index – a measurement of the price changes faced by a consumer if they replicated their online purchasing habits in a store – stands at +1.6%, meaning that consumers can make a considerable saving on goods purchased online.

Tristia Clarke, Commercial Director at TalkTalk said: “Whilst it’s no secret that there are great financial and time benefits to shopping online, it is surprising quite how much money can be saved. The price gap between shopping online and on the High Street has actually widened significantly in the past 12 months, reflected in the huge price differences we are seeing for buying the same item on the High Street and online. With many families still struggling to manage high household costs and debt, there’s never been a better time to get online to find the best value deals to save you time and money.

“We know just how much our customers love getting great value, especially during these tough economic times. We are proud to be the UK’s best value phone and broadband provider, offering better services at a fantastic price, and now we are doing the same for TV as part of our commitment to help make Britain better off.”

TalkTalk’s research also reveals where additional savings can be made. In furniture and homeware; – a Brabantia Pedal Bin costs £120 at a well-known department store but only £84.30 online; in clothing, a Nike Golf Tech Swoosh cap can set you back £11.99 at one high street retailer but is a snip at just £5.30 online, and in beauty and cosmetics – a pack of Garnier Skin Naturals Simply Essential Facial Cleansing Wipes costs £2.99 at one well-known pharmacy but just £1.80 online4.

Shehan Mohamed, economist at Cebr added: “We’ve found that whilst online shoppers have seen a fall in prices over the past year on the DRPI measure, those purchasing similar goods on the High Street have actually seen prices go up. Annual inflation might be steadily decreasing but it continues to remain higher than wage growth at 1.8% year-on-year –  less than half the pre-financial crisis average of 4.0% - which means that in reality, household budgets will continue to be squeezed going into the second half of this year. With online prices lower than a year ago, switching to internet retail offers one way for households to get round this squeeze on spending power.”

1Please consult notes to editors for retailers.
2Please consult notes to editors for retailers.
3Please consult notes to editors for retailers.
4Please consult notes to editors for retailers.