‘Optimism’ as meals value inflation slows to lowest degree this 12 months

Food value inflation has slowed to its lowest degree this 12 months – as prices fall for staples akin to oils, fat, fish, and breakfast cereals, analysis suggests.

However the speed of 13.4% – within the 12 months as much as July – nonetheless stays excessive.

But the British Retail Consortium (BRC), which compiled the figures with retail analysts NielsenIQ, mentioned it was nonetheless the bottom degree since December 2022 and represented “cause for optimism”.

It marks the third month in a row that the tempo of meals value rises has fallen, following charges of 15.4% in May and 14.6% in June.

NielsenIQ additionally mentioned the figures confirmed “the outlook is improving”.

Overall, the analysis discovered that annual store value inflation eased to 7.6% in July – the bottom charge this 12 months – down from 8.4% in June.

Prices fell in contrast with June – by 0.1% – for the primary time in two years.

Non-food inflation decreased to 4.7% in July, down from 5.4% in June, largely due to reductions within the value of garments and footwear.

Mike Watkins, head of retailer and enterprise perception at NielsenIQ, mentioned: “The summer season vacation interval ought to assist discretionary spend just a little and, while inflation stays excessive, the outlook is bettering.

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“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.”

However, the BRC cautioned that the pattern in falling meals inflation won’t proceed as easily within the coming months because the trade faces additional challenges, together with Russia’s current choice to drag out of a deal permitting for the protected export of grain from Ukraine.

Helen Dickinson, chief govt of the BRC, mentioned: “These figures give trigger for optimism, however additional provide chain points could add to enter prices for retailers within the months forward.

“Russia’s withdrawal from the Black Sea Grain initiative and subsequent focusing on of Ukrainian grain amenities, in addition to rice export restrictions from India are darkish clouds on the horizon.

“We count on some world commodity costs to rise once more consequently, and meals costs will likely be slower to fall.”

Earlier this month the Office for National Statistics reported an inflation charge of seven.9% within the 12 months to June, an even bigger than anticipated fall from 8.7% in May.