Shop price inflation falls again to reach lowest level in two years

Annual shop price inflation slowed to 2.5% in February, down from 2.9% in January and below the three-month average of 3.3%, according to the latest BRC-NielsenIQ Shop Price Index.

Food inflation declined to 5% in February, down from 6.1% the month before. February marked the 10th consecutive monthly decline in the food category and was below the three-month average of 6%.

Fresh food inflation reached its lowest since February 2022, declining to 3.4% in February from 4.9% in January. This was below the three-month average of 4.6%.

Ambient food inflation slowed to 7.2% in February, down from 7.7% in January and at its lowest since July 2022.

Non-food inflation remained the same at 1.3%, which is its lowest level since January 2022.

British Retail Consortium (BRC) chief executive Helen Dickinson said: “There was good news for consumers as shop price inflation fell to its lowest rate in nearly two years.

“Easing supply chain pressures have begun to feed through to food prices, but significant uncertainties remain as geopolitical tensions rise.

“Prices of non-food goods will be more susceptible to shipping costs, which have risen due to the re-routing of imports around the Cape of Good Hope.

“Domestically, retailers face a major rise to their business rates bills in April, determined by last September’s sky-high inflation rate.

“April’s rates rise should be based on April’s inflation, and the Chancellor should use the spring Budget to make this correction, supporting business investment and helping to drive down prices for consumers.”