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Price Inflation 1909-2009


Two threepenny bits from 1909 - enough to buy any item in the first British Woolworths storeTwo pounds and eleven pence in 2009, which statistically has the same value as sixpence a century earlierAs part of the research for this website and the History Book
"A Sixpenny Romance, celebrating a century of value at Woolworths", we reviewed published data from the Office of National Statistics, merging this with other sources from the former store-based company to collate a High Street price index for the chain's hundred years of trading.

According to our research, the original top price of six old pence (2½p) in 1909 equated to around £2.11 a century later. After deducting the effect of Value Added Tax after 1973, the original threepenny lines would be approximately £1 today and the 'luxury' sixpenny lines would be £2.

 

Graph showing retail inflation between 1909 to 2009.

The chart above shows the comparatively low inflation in the first half of the twentieth century. This gave the infant British Woolworth company a head start, with rises during the Great War counter-balanced by deflation during the Great Depression of the 1920s. By 1929 the chain had grown to almost 400 stores, with unrivalled buying power. Factory mass production meant that sixpence at Woolworths bought much more in 1929 than it had twenty years before.

The second half of the century saw spells of hyper inflation, with prices rising by 20% or more in a single year. Underneath the top line statistics there were wide variations between different types of products, some driven upwards by major increases in fuel prices (which rose ten-fold between 1969 and 2009) and others falling back as a result of a switch to manufacturing in the developing world, increased competition and lifestyle changes at home.

Just as the economic scene had helped Woolworths in its early years, market forces in the twenty-first century accelerated the collapse of the chain's business model. The company's management failed to react to these changes, caught like a rabbit in the headlights:

  • Woolworths Group relied heavily on CDs and DVDs for sales and profits in both its retail and wholesale divisions. The market declined rapidly in the 1990s and 2000s as customers switched allegiance to the Internet and Satellite television. In response retailers had to cut prices to compete with on-line rivals and to steal market share from other bricks and mortar stores. Between 1989 and 2008 the price of chart CD fell from £17.99 to £8.97, with a similar fall in DVD prices and the complete collapse of the singles market.
     
  • The supermarkets' move into 'General Merchandise' (non food) saw strong competition for seasonal ranges, with (for example) the price of School Uniforms, falling rapidly in the Noughties. A grey charcoal skirt cost £7.99 in 1999 but only £3.00 in 2008. The same competition affected Easter Eggs, Summer Furniture and Barbecues, Toys and Christmas Seasonal Lines. Woolworths maintained share by lowering prices and by making their suppliers deliver more for less, but had to sell much more to make the same amount of profit. In pure numbers the chain sold four times more CDs and DVDs in 2007 than in 1997, but with many in the new 'Cheap Chart' selling for just £1 or £2.
     
  • A comparison between the chain's Shoppers World Catalogue for Autumn/Winter 1978 and the Big Red Book for Winter 2008/2009 showed that more than half of the products had actually declined in price, even without taking inflation into account. Virtually every electrical item and bicycle had fallen in price, with many toys costing children less money than their parents a generation earlier. 

 

Throughout the 2000s investors and employees were sold the merits of the Group's dominance of the Entertainment market - spanning retailing, wholesale and production - as a virtue. None realised how cash-hungry the operations had become and how vulnerable they were to a collapse in the credit insurance market. All received a salutary economics lesson when their share values and employment contracts were wiped out in the credit crunch of 2008.

The table below shows the Virtual Museum's retail price index, which is also available to download as a Microsoft Excel spreadsheet. Please cite woolworthsmuseum.co.uk as a source if you choose to use the information to advance your research and accept the contents with our compliments.

All figures on this page are shown in British Pounds (GBP). Until decimalisation in February 1971 the United Kingdom had a duodecimal currency, with 240 pennies (abbreviated 'D' from the Latin Denarii) in a pound. In other words sixpence was one fortieth of a pound. Since decimalisation there have been one hundred pennies (abbreviated 'p' for pence) in a pound.

 

Year Inflation % £ equivalent of a 1909 Sixpence Year Inflation % £ equivalent of a 1909 Sixpence Year Inflation % £ equivalent of a 1909 Sixpence
1909 1 0.0253 1943 4 0.0530 1977 18 0.4065
1910 0 0.0253 1944 0 0.0530 1978 15 0.4674
1911 1 0.0255 1945 2.5 0.0543 1979 8 0.5048
1912 1 0.0258 1946 6.5 0.0578 1980 12 0.5654
1913 2 0.0263 1947 15 0.0665 1981 18 0.6672
1914 1 0.0265 1948 8 0.0718 1982 11 0.7406
1915 -1 0.0263 1949 8 0.0775 1983 5 0.7776
1916 12 0.0294 1950 2 0.0791 1984 4 0.8087
1917 23 0.0362 1951 6 0.0838 1985 5 0.8492
1918 18 0.0427 1952 10 0.0922 1986 3 0.8746
1919 10 0.0470 1953 6 0.0977 1987 5 0.9184
1920 6 0.0498 1954 4 0.1017 1988 7 0.9827
1921 0 0.0498 1955 2 0.1037 1989 8 1.0613
1922 -18 0.0408 1956 3 0.1068 1990 9 1.1568
1923 -10 0.0367 1957 2 0.1089 1991 7 1.2378
1924 -5 0.0349 1958 1 0.1100 1992 2 1.2625
1925 9 0.0381 1959 1 0.1111 1993 3 1.3004
1926 0 0.0381 1960 1 0.1122 1994 2 1.3264
1927 -1 0.0377 1961 2 0.1145 1995 4 1.3795
1928 -3 0.0365 1962 3 0.1179 1996 2 1.4070
1929 -5 0.0347 1963 2 0.1203 1997 3 1.4493
1930 -8 0.0319 1964 2 0.1227 1998 2 1.4782
1931 -6 0.0300 1965 4 0.1276 1999 2 1.5078
1932 -4 0.0288 1966 5 0.1340 2000 3 1.5530
1933 -2 0.0282 1967 4 0.1393 2001 3 1.5996
1934 0 0.0282 1968 5 0.1463 2002 3 1.6476
1935 1 0.0285 1969 5 0.1536 2003 3 1.6970
1936 4 0.0297 1970 6 0.1628 2004 3 1.7480
1937 2 0.0303 1971 8 0.1759 2005 3 1.8004
1938 8 0.0327 1972 6 0.1864 2006 3 1.8544
1939 12 0.0366 1973 10 0.2050 2007 3 1.9100
1940 15 0.0421 1974 12 0.2296 2008 5 2.0055
1941 12 0.0471 1975 20 0.2756 2009 5 2.1058
1942 8 0.0509 1976 25 0.3445