Food inflation eased to 2.5% in June, down from 3.2% in May, marking its lowest level since December 2021, according to the latest BRC-NielsenIQ shop price index.
This figure, which British Retail Consortium chief executive Helen Dickinson said was helped by “falling prices of key products such as butter and coffee,” is below the three months average rate of 3% and is the 14th consecutive deceleration in the food category.
Fresh food inflation also slowed further in June to 1.5%, down from 2% the month prior, while ambient food inflation decelerated to 3.9%, down from 4.8% in May.
Overall shop price annual inflation eased to 0.2%, the lowest since October 2021.
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Dickinson said: “During the height of the cost-of-living crisis, retailers invested heavily in improving their operations and supply chains to compensate for the impact of global shocks on input costs. This is clearly paying off, with shop prices having risen just 0.2% over the past 12 months.”
“The last few years should serve as a warning that where business costs rise significantly, consumer prices are forced up too,” she explained, adding that the next government “must address some of the major cost burdens weighing down the retail industry, including the broken business rates system, and inflexible apprenticeship levy“.
“By doing so, retailers can invest in lower prices for the future – helping to reduce the cost of living pressures that many families face.”
NielsenIQ head of retailer and business insight Mike Watkins added: “Shop price inflation is still slowing and this will be of help to shoppers as they plan their household budgets for essential goods and services. And with uncertainty around discretionary spending, we expect the intense competition across the marketplace to keep price increases as low as possible this summer.”
