By Max Clarke
Shop price inflation has eased off its upward trajectory thanks to a slowdown in the price of food, the British Retailers’ Consortium’s latest figures show.
Overall shop price inflation eased 0.1% in August to 2.7%, though food price inflation dropped to 5.0% from 5.2% in July.
Food prices have been growing at a rate far higher than inflation for the past year, as global surges in energy costs add to the price of staple commodities. Wheat prices in particular have spiked- by up to 72% in a year- following a number of harvests falling below expectations. This has seen the price of pasta and bread soar, as well as beef and dairy as wheat constitutes a major feed for livestock.
"This is a modest piece of good news for hard-pressed households,” said the BRC’s Stephen Robertson. “For the second month in a row a fall in overall shop price inflation can be put down to food inflation slowing. Global commodities, such as wheat, have dropped from the peaks they reached earlier in the year, though costs remain high. And good harvests of fresh fruit and vegetables such as apples, plums and corn-on-the-cob have also helped keep food prices down.
"Competition between retailers continues to protect consumers from the full impact of food inflation. Nearly 40 per cent of all groceries going through the tills are on some sort of promotion or special offer, meaning savvy shoppers can reduce the impact of price rises on their own budgets by picking the deals that work best for them.
"There has been a small rise in non-food inflation but it remains well below the level that could be expected following January's VAT rise. Retailers of big-ticket items in particular are dependent on high levels of discounting to make sales, keeping prices down for customers."
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