The British Retail Consortium (BRC) today announced that food inflation slowed by 0.2 per cent in August, standing at five per cent compared to July’s 5.2 per cent figure.
The BRC-Nielsen Shop Price Index reveals that overall shop price inflation slowed to 2.7 per cent in August from 2.8 per cent in July, while non-food inflation increased to 1.4 per cent in August from 1.3 per cent in July.
Stephen Robertson, BRC Director General, feels that this is positive news for cash-strapped consumers in the UK, who have seen their disposable incomes reduce significantly as the year has progressed.
“This is a modest piece of good news for hard-pressed households,” he commented.
“For the second month in a row a fall in overall shop price inflation can be put down to food inflation slowing.
“Global commodities, such as wheat, have dropped from the peaks they reached earlier in the year, though costs remain high.”
He also pointed out that good harvests of fresh fruit and vegetables such as apples, plums and corn-on-the-cob have helped keep food prices down, as competitive pricing from retailers allows shoppers to avoid the negative financial impact of food inflation.
Robertson added that the purchase of big ticket items remains a low priority for consumers during the ongoing economic downturn, and that these retailers are being forced to offer large discounts to entice shoppers.
This announcement follows news that consumer confidence is at its lowest level since the darkest times of the recession, as data released last week by Gfk NOP found that consumer confidence dropped one point in August to -31, falling for the third month in a row.
Commenting on this continued decrease, Mike Watkins, Senior Manager of Retailer Services at Nielsen, praised retailers for continuing promotions.
“With consumer confidence at levels that we last saw at the start of the recession three years ago, retailers have maintained the historically high levels of promotions and this is helping the many households with stretched budgets to save money,” he said.
“The good news for shoppers is that many high street and non-food retailers have been holding back on price increases during the summer and, for the second month running, food inflation has slowed at supermarkets.”