Food inflation “falling fast,” driven by drop in meat, potatoes and cooking oil prices, flags British Retail Consortium

29 Aug 2023 --- Food inflation decelerated to 11.5% in August, down from 13.4% in July, according to the British Retail Consortium (BRC). This is its lowest level for almost a year. But, the retail organization says the decline could have been even lower if the UK government hadn’t increased alcohol duties.

The latest statistics show food inflation is below the three-month average rate of 13.1% and is the fourth consecutive deceleration in the food category. 

“Better news for consumers as shop price inflation in August eased to its lowest level since October 2022. This was driven by falling food inflation, particularly for products such as meat, potatoes and some cooking oils,” says Helen Dickinson, BRC chief executive. 

“These figures would have been lower still had the Government not increased alcohol duties earlier this month.”

A further fall on the horizon?
While inflation is on course to continue to fall, there are supply chain risks for retailers to navigate, warns Dickinson, who warns that Russia’s ’withdrawal from the Black Sea Grain Initiative and its targeting of Ukrainian grain facilities, as well as poor harvests across Europe and beyond, could serve as potential roadblocks to lower inflation. 

“A potential £400m hike to business rates bills from next April would certainly jeopardize efforts to tackle inflation unless the Chancellor intervenes,” Dickinson continues.

According to the BRC- NielsenIQ Shop Price Index, fresh food inflation slowed further in August to 11.6%, down from 14.3% in July. This is below the three-month average rate of 13.8% and is at its lowest since August 2022.

Ambient Food inflation decelerated to 11.3% from 12.3% in July. This is the lowest since January.

 Meanwhile, toiletries and cosmetics saw price growth ease as many key components became cheaper, while inflation for clothing and footwear increased.

Edited by Gaynor Selby