Food retail prices rise for first time in six months

Prices in the grocery sector edged up 0.1% in January, after a 0.3% drop in December.

The result comes despite the big four grocers continuing to invest heavily in price to fend off the discounters.

Nielsen’s head of retailer and business insight Mike Watkins said: “Many seasonal lines have come off promotion which will have moved food prices upwards a little.”

However BRC chief executive Helen Dickinson warned the increase could be an anomaly.

“We will have to wait until next month’s figures to see whether this is a one-off blip or whether after a sustained period of price falls food prices are beginning to stabilise,” she said.

Overall shop prices fell 1.8% last month, compared to the same period last year. Dickinson said this was due to “continuing intense competition and retailers’ ongoing investment in price”.

It marked the 33^rd month of falling shop prices and the 34^th month of non-food price drops.

Non-food prices fell 3% driven by reductions in clothing, footwear, books, DIY, stationery and home entertainment, the BRC said. 

Dickinson added: “Higher levels of consumer confidence are currently translating into other parts of consumer spending – in leisure, entertainment and eating out - rather than into shopping which is providing the backdrop to a tough trading environment for retailers but great news for shoppers.”