The grocer price war has driven down overall food prices to the lowest level since the series’ inception.
Food inflation fell to 0.6 per cent in June while non-food inflation accelerated from 2.8 per cent in May to 3.4 per cent in June.
“Fierce competition among grocers has driven food price inflation to record low levels and with some grocers having announced plans to keep prices down, consumers stand to benefit for a while to come. While sports fans are doing well this summer with great deals to be found in Clothing, Footwear and Electricals,” commented Helen Dickinson, British Retail Consortium director general.
The shop price index for food has been falling fairly consistently since September 2012 but there were dramatic prices rises of Arabica coffee earlier this year which have remained volatile since. Cocoa prices are also 40 per cent higher from a year ago which will put pressure of confectioners’ profit margins but the price of wheat has tumbled over the last month, the BRC said.
Mike Watkins, head of retailer and business insight, Nielsen, said: “Food inflation is still low, many supermarkets are price cutting and non-food prices remain deflationary, so the high street continues to generate little inflationary pressure. Little in the way of immediate seasonal or weather related price increases is anticipated so the outlook for the next three months is for relatively stable shop price inflation