Food inflation eases but prices still lingering at near record highs

Research by the British Retail Consortium and Nielsen showed that in May, food inflation was at 15.4%, down from the 15.7% recorded in April but still the second-fastest annual increase ever measured.

BRC chief executive Helen Dickinson said the latest data gives her reason to believe food inflation may finally “be peaking”.

However, overall shop price inflation accelerated to 9% in May, up slightly from the 8.8% seen in April – this was above the three-month average of 8.9% and brings shop prices to a fresh high.

Dickinson said: “While overall shop price inflation rose slightly in May, households will welcome food inflation beginning to fall. The slowdown in inflation was largely driven by lower energy and commodity costs starting to filter through to lower prices of some staples including butter, milk, fruit and fish. Conversely, the price of chocolate and coffee rose off the back of the ongoing high global costs for these commodities. While non-food inflation rose, consumers are benefitting from heavy discounts in footwear as well as books and home entertainment.

“Fierce competition between supermarkets has helped keep British food among the cheapest of the large European economies. While there is reason to believe that food inflation might be peaking, it is vital that the government does not hamper this early progress by piling more costs onto retailers and forcing up the cost of goods even further. The biggest risk comes from policies such as the incoming border checks and reforms to packaging recycling fees.”