Food price inflation dropped significantly in July helping to drive down overall shop price inflation in the UK, new data published today has revealed.
According to the monthly Shop Price Index from the British Retail Consortium (BRC) and Nielsen, food inflation fell from 5.7 per cent in June to 5.2 per cent in July, resulting in overall shop price growth slipping 0.1 per cent to 2.8 per cent.
Today’s research comes after the Office for National Statistics reported a surprise drop in the UK’s official measure of inflation in June.
Heavy discounting in the retail industry was cited as a prime reason for the Consumer Price Index falling from 4.5 to 4.2 per cent month-on-month, and this trend apparently continued into July with 39 per cent of all groceries bought in supermarkets said to be on offer.
Stephen Robertson, BRC Director General, commented: “The fall in overall shop price inflation came almost entirely from food.
“Good crops of seasonal fresh fruit and vegetables boosting supplies and cheaper animal feed easing the pressure on meat prices were the prime reasons food inflation fell, offering some respite to squeezed household budgets.
“Customers have adapted their shopping habits to higher levels of inflation over the last few months. People are increasingly taking advantage of promotions to help mitigate against the full impact of inflation, so the effect of food inflation faced by consumers will be less than 5.2 per cent.”
Mike Watkins, Senior Manager of Retailer Services at Nielsen, said that retailers have been lowering prices in response to shoppers’ squeezed financial budgets.
“Looking ahead, we are optimistic that whilst prices will still be higher than last year, the rate of increase may start to slow later in the year,” he added.