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Food price inflation ‘steadily decreasing’

Food price inflation ‘steadily decreasing’

The inflation of food prices in the UK decreased during January, signalling a promising start to the year for both retailers and consumers.

Figures from the British Retail Consortium (BRC) and Nielsen show that between December 2013 and the beginning of 2014, food inflation decreased by 0.2 per cent from 1.7 per cent to 1.5 per cent. 

Although this may not seem like a highly significant amount, retail experts are positive that this could be a sign of things to come for the year ahead.

This figure also shows the slowest rate of food price inflation for nearly four years.

Helen Dickinson, director general of the BRC, said: "Food retailer members have managed to keep prices low again and with relatively stable commodity prices at the moment as well and forecasts for commodities quite upbeat, we may continue to benefit from this for some time yet."

Mike Watkins, Nielsen's head of retail and business insight, said that the slight decrease would have been very welcome among households who were trying to get back on track with their finances after Christmas.

The retail industry also saw a greater number of promotions and discounts throughout January, which will have contributed to the lower prices that have been inevitably popular with consumers.

Elsewhere in retail, non-food product prices experienced deflation, with the rate going from 2.3 per cent in December to 2.7 per cent during January.

Annual sales figures for the year ending in December 2013 showed that UK retailers experienced their fastest sales growth for more than nine years. 

Despite this, some major food retailers such as Tesco and Marks and Spencer reported a drop in sales over the Christmas period, suggesting that smaller stores may have played a bigger role in contributing to the industry's growth during this time.

However, the BRC's figures do not take online sales into account or factors associated with official consumer price inflation such as energy and transport costs.

 

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