Annual food price inflation slowed to 6.4% in May compared with 7.9% in April, according to figures from the British Retail Consortium (BRC) out today.
Non-food was down by 1.3%, from a 1.9% decrease in April, meaning overall shop price inflation rose by 1.3% in May, down slightly on April’s 1.4% rise.
Stephen Robertson, BRC director general, said: “This is the lowest food inflation rate of the year so far. This was largely driven by the biggest fall in fresh food inflation since the index began in December 2006.
“Food inflation has been falling since March, suggesting that the worst food price rises are behind us. Significant falls in the cost of commodities, such as oil, and the pound’s recent stabilisation have helped ease inflationary pressures.”
Mike Watkins, senior manager, retailer services, at analysts Nielsen said: “Fresh food inflation has now fallen for a third consecutive month. It appears that the pound’s recent depreciation has had most of the effect it’s going to on food prices and we are seeing the benefits of lower commodity prices working through to shop prices.
“With summer approaching, supermarkets are using high levels of promotions on seasonal lines to draw in customers, which are also helping keep food prices lower.”
The fall in annual food price inflation was primarily driven by fresh, which fell to 6.7% in May from 8.9% in April. Ambient foods fell to 5.9% in May from 6.4% in April.
The BRC said that after two consecutive months of falling food inflation it would appear that the past falls in the value of sterling are already entrenched into prices. Now that sterling has appeared to stabilise (and recently rallied against most major currencies) it expects food inflation will continue to fall in the coming months.
In May, fresh food inflation fell by 2.2 percentage points to 6.7%, marking the largest fall since the beginning of the index. The major downward pressure came from the fall in the rate of inflation for dairy products and convenience foods. Inflationary pressure from meat and vegetables also eased.
With comparisons against the highs of last summer looming, it is widely expected that food inflation will continue to ease in the coming months, the BRC said.
