UK Food Inflation at Lowest Level
UK Food inflation slowed to 1.1% in February from 1.5% in January – the lowest ever recorded – according to the BRC Nielsen Shop Price Index. Non-food reported annual deflation of 3.0% in February from 2.7% in January – the lowest ever recorded. Overall shop prices reported deflation for the tenth consecutive month in February, accelerating to 1.4% from 1.0% in January. This is the deepest level of deflation since the series began in December 2006.
Helen Dickinson, director general of British Retail Consortium, says: “This is the fastest fall seen in prices which are 1.4 per cent down overall in February. It is also the longest sustained period of price decreases we have witnessed, now ten months in a row. There are especially good deals available at the moment in clothing, electricals, books and stationery.”
She adds: “Hard-pressed families watching their budgets will also be helped by the lowest level of food inflation we’ve recorded, up just 1.1 per cent in February. In contrast to other household bills, the price of the weekly food shop is rising at a much slower pace. Many of the larger food retailers have been looking closely at their investment in promotions and price cuts, suggesting competition could intensify further. This should mean consumer price inflation remains at low levels in the coming months. It is clear that retailers’ hard work to keep prices low for UK consumers is having considerable success.”
Mike Watkins, head of Retailer and Business Insight, Nielsen, says: “We have seen further falls in the Shop Price Index at the start of 2014 in particular in food. This is reflective of a challenging trading environment due to weather and weak demand, but also more favourable global supply conditions during the second part of 2013. Looking ahead, we still anticipate shop prices to remain below CPI for the immediate future.”
