Tanya Beckett: "Consumers are now much more price conscious in their shopping."

Inflation is low but, better than that, the cost of goods on sale along UK high streets has actually fallen in the past two years.

After a sharp drop in consumer confidence and spending last year, retailers have had to slash prices to entice reluctant shoppers to part with their hard-earned cash.

Shoppers are warily starting to spend again

Those that were slow to do so - including Marks & Spencer - have suffered sales slumps.

Then there is the increasingly widespread use of the Internet, which has allowed shoppers to see how much cheaper items such as books and computers are if purchased overseas.

In cyberspace, there is a whole army of new competitors targeting the contents of shoppers' wallets.

The effect is easiest to illustrate in the case of books, where best-sellers are being offered at half-price by some Internet based retailers.

This has a knock-on effect as high-street booksellers launch their own special deals, such as "buy three for the price of two" offers.

Service stations

But while retailers may claim that they are being squeezed at every corner, the government is increasingly active in tackling any areas where competition appears to limited.

First it was cars and electrical goods, then supermarkets. Most recently it has been motorway service stations.

All have been accused of being too pricey for UK shoppers.

Whether these accusations are true or not, there is no doubt that consumers are now much more price conscious in their shopping.

While this new competition is good news for shoppers it is not such a bright new dawn for the embattled retailers.

Absolute nightmare

On Monday, retailers and suppliers, the Competition Commission and the Consumers Association gathered for a conference in London to examine how to react to this new retail environment.

Alan Taylor, Chief Executive of European Insight Group, the company which organised the conference says it is becoming a "nightmare" for some retailers accused of charging too much.

"Price differences with the Continent often result from the extra cost of land and the higher standards demanded by UK consumers," he said.

"Retailers' margins are going to be squeezed," said Mr Taylor of the outlook for shopkeepers in the UK.