Falling prices in some key staples lead to deceleration in food price inflation
Food price inflation slowed to its lowest level this year, with falling prices across key staples such as oils, fats, fish and breakfast cereals.
The latest figures from the British Retail Consortium (BRC) and NielsenIQ retail analysts, show food inflation decelerated to 13.4% in July, down from 14.6% in June – the lowest level since December 2022.
While annual shop price inflation also slowed, at 7.6% in July down from 8.4% in June, levels still remain high.
Helen Dickinson, BRC Chief Executive said the news was positive but there was still cause for concern.
“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.
‘The summer holiday period should help discretionary spend a little and whilst inflation remains high, the outlook is improving’
“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,” she added.
Meanwhile, Head of Retailer and Business Insight at NielsenIQ, Mike Watkins said the change in consumer behaviour looks set to remain.
“The summer holiday period should help discretionary spend a little and whilst inflation remains high, the outlook is improving,” he said.
“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.”
The latest BRC and NielsenIQ stats showed that fresh food inflation also slowed further in July, to 14.3%, down from 15.7% in June. Inflation in this category remains elevated, though this is the lowest level since December 2022.
Similarly ambient food inflation decelerated, to 12.3% in July down from 13% in June.
