09 Apr 2008


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Food price inflation slows to 4.1%

Industry statistics

supply chain

Annual food price inflation slowed during March to 4.1%, down from 4.6% in February, according to the latest BRC/Nielsen figures.

But the increase in food prices remains the main driver behind overall shop price inflation, which fell to 1.1%, from 1.3% in February.

Non-food prices dropped by 0.5% in March, against a 0.3% fall the previous month.

BRC director general Stephen Robertson said: “With customers’ finances under real strain, retailers recognise value is crucial. They’ve cut many prices and overall annual shop price inflation has fallen back to levels not seen since November.

“This was largely driven by significant falls in the price of electrical goods and clothing and a slowdown in food price increases as retailers took the hit from rises in world commodity prices rather than passing them on.

“Certainly, what inflation we’ve got is coming from rising costs not excess demand leaving the way clear for the Bank of England to cut rates tomorrow.”

Mike Watkins, senior manager for retailer services at Nielsen said: “Shoppers have been feeling the impact of food price inflation for over a year now, initially for fresh and chilled and more recently for ambient foods.

“The imbalance of supply and demand for global foodstuffs looks set to continue so this inflationary pressure is likely to mean that value for money becomes more top of mind for shoppers as the year goes on.”

The increase in food prices was driven by a rise in both fresh and ambient food, at 4.5% and 3.6% respectively.

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