In the food category, shop price inflation continued to slow down for the fourth consecutive month, dropping to 11.8% in August. This is below the three-month average of 13.1% and marks the lowest food inflation rate since September 2022.
Furthermore, the overall annual shop price inflation witnessed a further deceleration in August, reaching 6.9% compared to 7.6% in July.
Helen Dickinson, the Chief Executive Officer of BRC, expressed positive news for consumers, as shop price inflation in August eased to its lowest level since October 2022. This improvement can be attributed to the decrease in food inflation, particularly for products such as meat, potatoes, and cooking oils.
Dickinson added that the figures could potentially have been even lower if the government had not implemented alcohol duty increases earlier in the month.
According to Mike Watkins, the Head of Retailer and Business Insight at NIQ (formerly NielsenIQ), the recent unpredictable weather conditions have dampened consumer demand, leading some high street retailers to increase their promotional activities. Food retailers have also continued to extend price cuts as the inflationary pressure stemming from supply chains gradually eases.
Looking ahead, a survey conducted by NIQ indicates that 60% of households anticipate being moderately or severely impacted by rising household costs in the coming months. Consequently, even as inflation decelerates, consumers are expected to remain cautious about discretionary spending upon their return from summer holidays.
