Food inflation has dropped to 11.5% in August, down 13.4% in July, meaning it is now at its lowest point since September 2022.
This is according to the latest inflation figures from the British Retail Consortium (BRC) which also showed that shop price growth is at its lowest since October 2022.
Shop price annual inflation decelerated to 6.9% in August – down from 7.6% in July. This is below the three-month average rate of 7.7%.
Fresh food inflation slowed further in August, to 11.6%, down from 14.3% in July. This is below the 3-month average rate of 13.8% and is at its lowest since August 2022.
Chief executive of the BRC, Helen Dickinson, said the changes bring “better news” for consumers, but that supply chain risks may see a rise in food inflation again.
“Better news for consumers as shop price inflation in August eased to its lowest level since October 2022. This was driven by falling food inflation, particularly for products such as meat, potatoes and some cooking oils,” she said.
“While inflation is on course to continue to fall thanks to retailers’ efforts, there are supply chain risks for retailers to navigate.
“Russia’s withdrawal from the Black Sea Grain Initiative and its targeting of Ukrainian grain facilities, as well as poor harvests across Europe and beyond, could serve as potential roadblocks to lower inflation.”
Head of retailer and business insight at NielsenIQ, Mike Watkins, said: “The unpredictable weather of recent weeks has dampened consumer demand with some high street retailers increasing promotional activity and food retailers continuing to extend price cuts, as the inflationary pressure coming from supply chains continues to lessen.
“Looking ahead, a NIQ survey shows that 60% of households expect to be severely or moderately impacted by rising household costs in the coming months so once back from summer holidays, we expect consumers to remain cautious about discretionary spend even as inflation decelerates.”
