The British Retail Consortium (BRC) has shown that food price inflation is decelerating across the board, with fresh food inflation at its lowest since July 2022.
Shop Price annual inflation decelerated further to 6.2% in September, down from 6.9% in August and its lowest since September 2022. This is below the three-month average rate of 6.8%.
Food inflation was at a rate of 11.6% in August and has slowed to 9.6% in September, sitting below the three-month average of 11.5%. Food inflation is at its lowest since July 2022.
Fresh food and ambient food inflation slowed to 9.6% and 10.4% respectively, down from 11.6% and 11.3% during the month of August.
Inflation expected to fall amid continued budget pressures
Helen Dickinson, OBE, chief executive of the BRC, said: “Food prices dropped on the previous month for the first time in over two years because of fierce competition between retailers. This brought year-on-year food inflation down to single digits and contributed to the fifth consecutive monthly fall in the headline rate, helped by easing cost pressures.
“Customers who bought dairy, margarine, fish and vegetables – all typically own-brand lines – will have found lower prices compared to last month.
“We expect Shop Price Inflation to continue to fall over the rest of the year, however there are still many risks to this trend – high interest rates, climbing oil prices, global shortages of sugar, as well as the supply chain disruption from the war in Ukraine.
“Retailers will continue to do all they can to support their customers and bring prices down, especially as households face being squeezed by higher energy and mortgage bills.”
NielsenIQ head of retailer and business insight Mike Watkins said: “With further price cuts by supermarkets in recent weeks, food inflation continues to slow which is good news.
“However, there continues to be pressure on budgets, with over half of households still feeling that they are significantly impacted by the continued increases in cost of living (NIQ Mid-Year Consumer Outlook).
“So, it will be important for retail sales to keep momentum which means we can expect more price cuts and increased promotional activity across all retail channels.”
