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Food inflation remained unchanged last month


Food inflation remained unchanged in September at 3.1 per cent, the third consecutive month the figure has remained stagnant despite predictions of price rises, figures released today reveal.

Ongoing in-fighting amongst the top UK grocers is ensuring that commodity price increases do not affect consumers as the big four and others continue to battle for market share at the cost of their margins, knowing that promotions remain appealing to financially squeezed shoppers, according to the British Retail Consortium (BRC)-Nielsen Shop Price Index.

Earlier today supermarket chain Sainsbury’s, which announced a total sales rise of 4.4 per cent excluding fuel in its second quarter, had a complaint against it upheld by the Advertising Standards Authority, which ruled that future ads relating to its Brand Match promise must be more clear to avoid misleading the public.

Stephen Robertson, Director-General of the BRC, said: “Food inflation remains at a two-year low for the third month running despite inflationary pressures building up in the supply chain from rises in global commodities.

“These shop price figures show retailers are holding back much of the impact as they battle it out for every bit of spending available from hard-up customers.

“Promotions, including multi-buy offers, fuel coupons and price matching are commonplace and helping to keep grocery bills down while non-food prices have now been cheaper than a year ago for eight months in a row as prices of furniture, electricals and clothing are cut to generate sales.”

Overall shop price inflation slowed by 0.1 per cent in September compared with a month previously while deflation in non-food rose to 0.2 per cent from 0.1 per cent in August, driven by the ongoing deflation of clothing & footwear and electricals over the period.

Mike Watkins, Senior Manager of Retailer Services at Nielsen said that, although heavy discounting may detrimentally affect margins, consumer confidence is likely to be boosted by this focus on value for money.

He commented: “Over the last month, we have seen some welcome stability in food retailing and sales growths have improved a little compared with the early summer.

“Retailers have maintained the high levels of promotional activity at 35 per cent of sales and food inflation remains at a two-year low point at just over three per cent.

“This will be helping shoppers to plan with more confidence when juggling their household budgets.”

Published on Wednesday 03 October by Editorial Assistant

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