Fresh food inflation slows in November

Fresh food inflation slowed in November, according to the latest BRC-Nielsen shop price index.

Recent analysis shows the rate of fresh food increase decelerated to 1.3 per cent, falling from 2.2 per cent in October. Meanwhile overall price deflation remained at a four-year low, falling by 0.1 per cent in November. Ambient food inflation rates also dropped, from 2.2 per cent last month to 1.8 per cent.

November marks the 55th consecutive month of deflation, and current rates remain the shallowest in the last four years. British Retail Consortium said the findings were a welcome relief during a time of economic incertitude for the industry.

BRC chief executive Helen Dickinson, said: “The lower projections for consumer spending, that came from the OBR’s downbeat forecast last week, and uplifts in labour costs, conjure up a perfect storm of economic pressures looming over an industry that’s already fiercely competitive.

“That’s why we were pleased that the Chancellor listened to us and others and brought forward the switch from RPI to CPI indexation on business rates – not the fundamental reform needed but an important step forward which will undoubtedly ease some of the pressure and enable retailers to continue with some investment which would otherwise have been threatened”, Ms Dickinson continued.

Meanwhile Nielsen’s head of retailer and business insight Mike Watkins pointed to the benefit of inflation rates on consumer spending, highlighting its potential to fuel purchasing in the run up to Christmas.

As Mr Watkins said: “Many inflationary increases are still being absorbed by retailers and are not being passed on to the consumer in the form of higher prices. Nevertheless, the deflation in non-food continues to overshadow the discounting and promotional activity taking place in this channel as consumers become more cautious and look for ways to save on their household bills.”

 

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