Food inflation has remained flat for the third consecutive month at 3.1%, surprising analysts who had forecast price increases due to large rises in commodity prices.
The British Retail Consortium (BRC) Nielsen Shop Price Index for September said commodity price rises have not yet fed through to food prices in shops. The Thomson/Reuters – CRB Index reported commodities have risen 14% in the last three months.
But the BRC warned despite the flat result for September commodity price rises are still threatening to push food prices up, putting an end to the competitive prices shoppers have been enjoying recently.
Overall shop price inflation edged down to 1% for the month from 1.1% in August.
BRC director general Stephen Robertson said: ““Food inflation remains at a two-year low for the third month running despite inflationary pressures building up in the supply chain from rises in global commodities such as wheat and soyabeans.
“These shop price figures show retailers are holding back much of the impact as they battle it out for every bit of spending available from hard-up customers. Promotions, including multi-buy offers, fuel coupons and price matching are commonplace and helping to keep grocery bills down while non-food prices have now been cheaper than a year ago for eight months in a row as prices of furniture, electricals and clothing are cut to generate sales.”
Fresh food prices rose 0.5% to 3% in September, while ambient food inflation slowed to its lowest inflation rates in two years to 3.2% in September from 4% in August.
Non-food prices were all under pressure as clothing and footwear, and electricals deflation accelerated further, inflation across furniture and flooring and entertainment slowed.