Easing global commodity prices also filtered through to supermarket shelves, driving food inflation lower, with ambient grocery inflation falling to its lowest point in four years, shows the recent industry data released today (March 3) by British Retail Consortium (BRC).
The data shows that food inflation increased 3.5% year on year in February, against growth of 3.9% in January. This is in line with the 3-month average of 3.5%.
Fresh food inflation increased 4.3% year on year in February, against growth of 4.4% in January. This is above the 3-month average of 4.2%. Ambient Food inflation increased 2.3% year on year in February, against growth of 3.1% in January. This is below the 3-month average of 2.6%.
Overall, shop price inflation increased 1.1% year on year in February, against growth of 1.5% in January. This is in line with the 3-month average of 1.1%.
Helen Dickinson, Chief Executive of the BRC, said, “Households got some welcome relief in February as shop price inflation eased. Fierce competition between retailers kept price rises in check, with promotions across health, beauty and fashion.
"Falling global food costs also fed through, pushing food inflation down, with ambient food inflation dropping to its lowest level in four years.
“While the direction of travel is promising, prices are still rising, and many consumers remain under pressure. Retail operates on thin margins yet has faced relentless tax rises in recent years.
"The Employment Rights Act could add further complexity if secondary legislation is implemented without an eye firmly on the potential consequences for the cost of doing business and hence the cost of living. Poor implementation decisions by government would stymie job creation and push inflation back up.”
Commenting on the figures, Mike Watkins, Head of Retailer and Business Insight, NIQ, said, “Since the start of the year, we have seen some competitive pricing across both the food and non-food channels which is helping to bring down inflation.
"Whilst the inclement weather and weak sentiment is making consumer demand rather unpredictable for retailers, at least shoppers are now seeing some of their cost of living pressures start to ease.”