Shop price inflation fell in January to its lowest level since May 2022 as food inflation dropped for the ninth consecutive month.
Annual shop price inflation decreased to 2.9% in January, down from 4.3% in December and below the three-month average of 3.9%, according to the latest BRC-NielsenIQ Shop Price Index.
Food inflation slowed to 6.1% in January, down from 6.7% in December – the ninth consecutive month of deceleration that food has seen.
This is below the three-month average of 6.8%; food inflation is now at its lowest since June 2022.
Meanwhile, fresh food inflation fell to 4.9% in January from 5.4% in December, while ambient food decreased to 7.7% in January down from 8.4% in December.
Non-food inflation reached its lowest level since February 2022, as it fell to 1.3% in January from 3.1% in December.
BRC chief executive Helen Dickinson said: “Some New Year cheer as January shop price inflation slid to its lowest level since May 2022.
“Non-food goods drove the fall, as many retailers offered heavily discounted goods in their January sales to entice consumer spend amidst weak demand.
“Good news for the morning brew as the price of tea and milk fell, while evening tipples remained more expensive on the back of increased alcohol duties.”
Dickinson continued: “Retailers have spent the last eight months working to bring down inflation, but progress will likely be hampered by new cost pressures coming direct from government – including implementing the increase in the National Living Wage on top of an above-inflation rise in business rates this April, a potential new grocer ‘surtax’ in Scotland, and ill-conceived recycling proposals.
“Rising geopolitical tensions will also add to uncertainty and costs in supply chains. With a general election later this year, we want to see political parties outline how they will help unlock investment across the country rather than the current trajectory which is doing just the opposite.”