According to the British Retail Consortium (BRC), the U.K. shop prices declined by 1.8% year-on-year in January, after a 2.0% decline in December.

The decline was mainly driven by a drop in non-food prices, which plunged 3.0% year-on-year in January.

Food prices rose at an annual rate of 0.1% in January.

"Higher levels of consumer confidence are currently translating into other parts of consumer spending - in leisure, entertainment and eating out - rather than into shopping which is providing the backdrop to a tough trading environment for retailers but great news for shoppers," BRC Chief Executive, Helen Dickinson, said.