Fresh food inflation at lowest level in two years

According to latest reports from the British Retail Consortium (BRC), food inflation has taken another fall, and during the month of September it stood at 9.9 percent, dropping from 11.5 percent in August.

Branding this a “win” for consumers, the BRC has also disclosed that shop price annual inflation decelerated further to 6.2 percent in September. This is down from 6.9 percent in August 2023, with the latest September figure putting shop price inflation “at its lowest” since September the previous year.

Zooming in on various food categories, fresh food inflation has been found to have dropped to 9.6 percent in September which is down by two percent from August, with inflation in this category being at its lowest in 14 months.

Meanwhile, the BRC has announced that ambient food inflation also decelerated to 10.4 percent in September, which is down from 11.3 percent in August.

Commenting on the consumer “win”, Helen Dickinson, OBE, Chief Executive of the British Retail Consortium, said: “Food prices dropped on the previous month for the first time in over two years because of fierce competition between retailers.

How can we fix food insecurity in London?

“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.”

Looking at specific food price drops, Dickinson revealed that consumers who purchased dairy, margarine, fish and vegetables (typically own-brand lines) “will have found lower prices compared to last month”.

Turning her attention to the rest of 2023, Dickinson said: “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.”

Meanwhile, Mike Watkins, Head of Retailer and Business Insight, NielsenIQ, defined the latest announcement as “good news” but pointed out “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”.  

“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,” concluded Watkins.