Food inflation rose to 2.3% in September, driven by poor harvests affecting key regions.
- The British Retail Consortium reported a significant impact on prices for sugary products and cooking oils.
- Fresh food inflation climbed to 1.5% from August’s 1%, while ambient food inflation decreased to 3.3%.
- Overall shop price deflation was noted, with rates at their lowest since August 2021.
- Retail experts foresee continued challenges, urging strategic promotional activities to drive demand.
Food inflation experienced an uptick to 2.3% in September, contrasting with August’s 2%, as poor harvests in critical areas led to price increases, notably affecting sugary products and cooking oils. The British Retail Consortium (BRC)-NielsenIQ Shop Price Index highlighted this trend, underscoring significant shifts within the food pricing landscape.
Fresh food inflation rose from 1% in August to 1.5% in September, reflecting the pressures on perishable goods. Meanwhile, ambient food inflation showed a slight decrease, reaching 3.3%, the lowest since March 2022, providing a mixed picture of the market dynamics.
Overall shop price deflation was recorded at 0.6% in September, a decrease from 0.3% in the previous month, marking the lowest annual growth rate since August 2021. This indicates a stabilisation in shop price inflation trends, aligning with long-term projections according to NielsenIQ’s insights.
Retail industry leaders stress the importance of consumer-friendly promotions amidst these economic conditions. BRC Chief Executive Helen Dickinson noted September’s advantageous climate for bargain hunters due to extensive discounts and heightened competition.
However, challenges persist with ongoing geopolitical tensions, climate change, and regulatory costs potentially reversing the current trend of easing price inflation. Dickinson emphasised the need for government intervention, proposing a 20% Retail Rates Corrector to balance the tax discrepancies faced by the retail sector, aiming to maintain competitive pricing and stimulate market activity.
The inflationary pressures on food prices, compounded by global harvest issues, require strategic responses to maintain consumer confidence and market stability.
