Competition between retailers and sharp falls in commodity costs eased food price inflation to its lowest level for more than a year-and-a-half last month, new figures have revealed.
Food prices rose by 3.8% in July, slowing sharply from a 5.6% increase in June and marking the fourth month of falling inflation in a row, according to the British Retail Consortium (BRC)-Nielsen Shop Price Index.
Hefty price cutting in the supermarkets has helped fresh food — particularly fruit and vegetables — fall from a record high of 11.9% last August to 3.1% in July, the research showed.
Meat prices also continued to fall back thanks to lower commodity prices, which had hiked the cost of animal feed.
Overall shop price inflation stood at 0.5% in July, its lowest since December last year, with consumers in line for further good news, said the BRC.
Stephen Robertson, BRC |director general, said: “Customers are benefiting from the high degree of competition between UK retailers.
“With some commodity price falls still to filter through, the rate of inflation could yet fall further.”
However, “ambient” food inflation has not fallen as far as fresh food, at 4.8% last month, and there could be some upward pressure from an expected surge in sugar prices.
There has also been a slowdown in price declines across the non-food sector as the recent pick-up in the UK property market has lent support to some products, such as furniture and floor coverings.