Non-food inflation lowest since November 2009

Overall shop price inflation remained unchanged at 1.5% in July, and food inflation increased to 2.5% from 1.7% the previous month.

Stephen Robertson, British Retail Consortium director general, said: “Shop price inflation remained low and well below other measures of inflation as a slowdown in non-food prices compensated for an increase in food inflation.  

“The overall figure remained the same as June and is half the rate of the official Consumer Price Index.  It’s clear the high street is the not the main source of inflation.”

He added: “Food inflation was higher than the previous month - driven by global factors putting pressure on the cost of fresh food, such as meat and fruit. The recent dry weather has increased the price of animal feed and poor harvests have reduced some fruit crops.  Problems with production in large wheat exporting countries, such as Russia and Canada, could put pressure on overall food inflation in the coming months.”

Nielsen senior manager, retailer services, Mike Watkins, said: “Shop price inflation remains below consumer price inflation and the moderate increases in the price of food in July are being driven by wider economic conditions and seasonal supply changes.

“Despite some attractive and short term offers for the World Cup there was little sustainable sales growth for food retailers and, with shoppers indicating that they are becoming more cautious about spending both food and non-food retailers are continuing to focus on delivering price cuts and re-enforcing this with value for money promotions.”