In October, food inflation in the UK experienced a notable deceleration, dropping to 1.9% from the previous month’s 2.3%, according to the British Retail Consortium (BRC). This slowdown was particularly evident in categories like meat, fish, and tea, offering a temporary reprieve for consumers. However, the BRC has called for decisive action in the forthcoming Budget to maintain this downward trend in prices.
The BRC-NielsenIQ Shop Price Index for October revealed that food inflation also eased for chocolate and sweets, attributed to retailers capitalising on seasonal promotions. Fresh food inflation declined to 1%, a decrease from September’s 1.5%, while ambient food inflation slowed slightly to 3.1% from 3.3%. BRC CEO Helen Dickinson pointed out that, although the current reduction in price inflation is favourable, it remains susceptible to external pressures such as geopolitical tensions, climate change impacts on food supplies, and government regulations.
Retailers are reportedly grappling with higher tax burdens compared to other industries, a situation which the BRC argues is unfair. They propose that the Chancellor address this in the upcoming Budget by implementing a ‘Retail Rates Corrector’, a strategic 20% reduction in business rates for retail properties. Such a measure, they assert, would empower retailers to continue providing competitive prices, safeguard employment opportunities, and encourage investment.
Overall shop price deflation was recorded at 0.8% in October, exceeding the previous month’s deflation rate of 0.6%, and falling below the three-month average rate of -0.6%. Mike Watkins, NielsenIQ’s head of retailer and business insight, remarked that although inflation in the food supply chain is easing, other cost pressures persist. The advent of Christmas promotions is intensifying the battle among retailers for discretionary consumer spending, impacting both food and non-food sectors.
The recent easing of food inflation offers a glimmer of hope for consumers, yet the sustainability of this trend is uncertain without fiscal policy support. The BRC’s call for a balanced approach in the forthcoming Budget highlights the need for measures that will ensure stable prices, particularly as external challenges continue to loom.
