Shop price inflation remains flat in December as food prices fall

Annual shop price inflation remained unchanged at 4.3% in December, falling below the three-month average rate of 4.6%.

Shop price growth was at its lowest since June 2022, according to the latest BRC-NielsenIQ Shop Price Index.

Food inflation fell for the eighth consecutive month to 6.7% in December, down from 7.7% in November, and is at its lowest since June 2022. This is below the three-month average of 7.7%.

Fresh food inflation slowed to 5.4% in December from 6.7% in November. Ambient food inflation decelerated to 8.4% in December, compared with 9.2% in November

Non-food inflation was also at its lowest since September 2022, despite increasing to 3.1% in December from the 2.5% reported in November.

Helen Dickinson, chief executive of the British Retail Consortium, said: “Overall shop price inflation remained steady in December. Households did have reason to celebrate as food inflation fell for the eighth consecutive month, thanks to retailers’ efforts to bring down prices in the run-up to Christmas. There was cause for merriment as prices of wine, port and sherry fell on the month. 

“Non-food products had a more challenging December, with price inflation rising again, following retailers’ investment in November Black Friday discounting and ahead of the January Sales.

“Retailers will continue to do all they can to keep prices down in 2024, but there are obstacles on the road ahead: new border checks for EU imports and hundreds of millions more on business rates bills from April.

“Government should think twice before imposing new costs on retail businesses that would not only hold back vital investment in local communities but also push up prices for struggling households.”