Food inflation continues to slow to its lowest level since December 2022 as acceleration rates fall month on month.
Food inflation decelerated to 13.4% in July, down from 14.6% in June, while fresh food inflation slowed to 14.3% down from 15.7% in June. This is the lowest level seen since November 2022. In July, ambient food inflation decelerated to 12.3%, down from 13% in June.
Annual Shop Price inflation has decelerated to 7.6% in July, down from 8.4% in June. This is below the three month average rate of 8.4%, and it is at its lowest level this year.
Industry remains optimistic despite further supply chain issues
Helen Dickinson, OBE, chief executive of the British Retail Consortium, said: “Shop price inflation fell to its lowest level of 2023 and, for the first time in two years, prices fell compared to the previous month.
“Food price inflation also slowed to its lowest level this year, with falling prices across key staples such as oils, fats, fish, and breakfast cereals.
“These figures give cause for optimism, but further supply chain issues may add to input costs for retailers in the months ahead. Russia’s withdrawal from the Black Sea Grain Initiative and subsequent targeting of Ukrainian grain facilities, as well as rice export restrictions from India are dark clouds on the horizon. We expect some global commodity prices to rise again as a result, and food prices will be slower to fall. Retailers continue working hard to keep falling prices on track.
“Government must also play its part and freeze business rates from next April, or else risk adding a £400m additional pressure on prices.”
Mike Watkins, head of retailer and business insight, NielsenIQ, said: “The summer holiday period should help discretionary spend a little and whilst inflation remains high, the outlook is improving. Shoppers continue to change how they shop as part of their coping strategies. This includes shopping at different retailers, buying lower priced items, delaying spend or only buying when there are promotions. This behaviour looks set to continue.”
