Shop price inflation eased this month, as increased competition and promotions helped bring down food prices, particularly across meat and dairy, shows sector data released today (Sept 29). However, poor harvests pushed up fruit prices, while elevated global commodity costs continued to keep chocolate and confectionery prices high.
According to latest data released by British Retail Consortium (BRC) covering Sept 1 to Sept 7, shop price inflation decreased to 1.4% year on year in September, against growth of 1.5% in August. This is above the 3-month average of 1.3%.
Non-Food inflation decreased to 0.8% year on year in September, against growth of 0.9% in August. This is above the 3-month average of 0.6%.
Food inflation decreased to 2.5% year on year in September, against growth of 2.8% in August. This is in line with the 3-month average of 2.5%. Fresh Food inflation decreased to 2.6% year on year in September, against growth of 3.0% in August. This is below the 3-month average of 2.9%.
Ambient Food inflation decreased to 2.2% year on year in September, against growth of 2.5% in August. This is above the 3-month average of 1.9%.
Commenting on the figures, Helen Dickinson, Chief Executive of the BRC, said: “Shop price inflation edged down this month, with food inflation falling as competition between retailers continued to deliver value for shoppers.
"Promotions helped bring down meat and dairy prices, though poor harvests across Europe pushed up fruit prices and high global commodity prices kept chocolate and confectionery prices elevated. In non-food, strong discounting reduced the cost of back-to-school essentials, including books, stationery, footwear and electricals.
“Retailers have absorbed wave after wave of extra costs, but there is a limit to what businesses can shoulder. With higher business rates set to hit in April, alongside rising employment costs, energy bills and packaging taxes, the Budget is a fork in the road.
"The Chancellor can help keep prices down by freezing the rates rise and removing shops from the business rates surtax, or risk pushing even more costs onto consumers.”
Mike Watkins, Head of Retailer and Business Insight, NIQ, said: “Shoppers reset spend in September and sales growth slowed after the hot summer. So many retailers have maintained promotions, and some have introduced price cuts to help drive demand, all of which is helping to keep inflation lower than a year ago.
"Q4 is expected to bring tighter household budgeting so retailers will still need to absorb cost increases wherever possible.”