Food inflation accelerates in January

Food inflation accelerated in January, despite the continued decline in shop prices in general, show latest data.

Food prices increased by 1.6 percent in January, up from 1.4 percent in December, according to the BRC-Nielsen Shop Price Index.

Fresh food inflation eased to 0.7 percent in January from 0.8 percent in December and ambient food inflation accelerated to 2.8 percent in January up from 2.4 percent in the previous month.

“Grocery prices could rise further as last year’s increase in global food prices filters through to British shelves; nonetheless, food prices remain low by European standards,” commented Helen Dickinson, chief executive of British Retail Consortium.

However, overall January shop prices fell by 0.3 percent compared to a 0.4 percent decrease in December. Non-food prices fell by 1.5 percent, the same rate of decrease as in December.

“There is no inflationary pressure coming from the high street as shoppers remain nervous about spending and discounting continues for many non-food retailers,” said Mike Watkins, head of retailer and business insight at Nielsen.

“Whilst promotions in supermarkets have returned to more normal levels post-Christmas, the sector remains embattled with fierce price competition which looks set to continue. And after a decline in volumes across food retailing last year, the industry will be looking to stabilise sales in the first quarter.”