Latest data from BRC-NIQ Shop Price Index adds to recent evidence that food inflation is continuing to ease despite the emergence of new cost pressures.
The overall shop price inflation figure dropped to 6.9% this month from 7.6% in July. This was driven by a sharp deceleration in food inflation, which fell from 13.4% to 11.5% – its lowest since September 2022.
Fresh Food inflation slowed to 11.6%, down from 14.3% in July, the lowest since August 2022. The BRC noted that inflation eased the most in categories such as meat, potatoes and cooking oils. Ambient food inflation eased more gently, falling from 12.3% to 11.3%.
Meanwhile, non-food inflation remained unchanged at 4.7% in August. Categories such as toiletries and cosmetics saw price growth ease as key components became cheaper, whilst inflation for clothing and footwear increased as retailers unwound their summer sales.
Helen Dickinson, Chief Executive of the BRC, commented: “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.”
She added: “A potential £400m hike to business rates bills from next April would certainly jeopardise efforts to tackle inflation unless the Chancellor intervenes.”
