Food inflation slowed in July to 5.2% from 5.7% the previous month.
According to the BRC-Nielsen Shop Price Index, non-food inflation was unchanged in July at 1.3%. Overall shop price inflation slowed to 2.8% in July from 2.9% in June.
BRC director general Stephen Robertson said: “The fall in overall shop price inflation came almost entirely from food.
“Good crops of seasonal fresh fruit and vegetables boosting supplies and cheaper animal feed easing the pressure on meat prices were the prime reasons food inflation fell, offering some respite to squeezed household budgets.
“Customers have adapted their shopping habits to higher levels of inflation over the last few months. People are increasingly taking advantage of promotions to help mitigate against the full impact of inflation, so the effect of food inflation faced by consumers will be less than 5.2%. Thirty-nine per cent of all the groceries being bought in supermarkets are now on offer.
“High world commodity costs and import inflation resulting from rising prices in China are still the key factors behind shop price rises. Non-food inflation was virtually unchanged from June but is still remarkably low, especially since these figures include the effect of the VAT rise.”
Mike Watkins, senior manager, retailer services, at Nielsen, said: “While food inflation moderated a little in July, we have seen sales volumes slow across both food and non-food retailing in recent weeks with shoppers still looking for savings to help pay for increases in other household bills such as transport and energy.
“Retailers have responded with a continuation of price cuts and promotions to stimulate demand at a time when many households are shopping differently to help manage household budgets. Looking ahead, we are optimistic that whilst prices will still be higher than last year, the rate of increase may start to slow later in the year.”