UK Shop Price Inflation at 10-Month Low

The rate of price increases in UK stores has decelerated to its slowest growth rate since October, as reported by the British Retail Consortium (BRC). The BRC revealed that prices climbed by 6.9% in the year leading up to August, down from July’s 8.4%. The primary driver behind this decline was the moderation in the rate of increase for fresh food prices, which slowed to 11.6% in August from 14.3% in July.

Non-food item inflation, on the other hand, remained constant at 4.7% for the current month. Helen Dickinson, the BRC’s chief executive, commented on the situation, stating, “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. While inflation is on course to continue to fall thanks to retailers’ efforts, there are supply chain risks for retailers to navigate. 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.”

Meanwhile, a separate survey conducted by the British consumer group Which? indicated that food prices, consistently exceeding overall inflation rates, have now become a comparable concern to energy costs among households. In response to high prices, over three-quarters of consumers adjusted their shopping behaviors, with 54% opting for cheaper products and 24% forgoing certain foods. Alarming data revealed that one in seven individuals were skipping meals due to elevated food expenses.

Katie Alpin, Head of Strategic Insight at Which?, pointed out that the “cost of the weekly shop is now on a par with energy bills as the biggest worry for millions of households.” Alpin emphasized that supermarkets hold the capacity to alleviate the financial strain on shoppers by incorporating budget-friendly items into more expensive convenience stores, a move that could significantly benefit families and those with lower incomes. Additionally, the survey indicated a decline in trust levels within the grocery sector, marking a ten-year low. This trust score plummeted from 24 in February 2013 to 30 in the current month, largely attributed to sustained increases in food prices over the past few months.