While overall shop price inflation rose slightly in May, households will welcome food inflation beginning to fall.
According to the latest BRC-NielsenIQ Shop Price Index for May 2023, shop price annual inflation accelerated to 9%y, up slightly from 8.8% in April. This is above the 3-month average rate of 8.9%. This brings shop price growth to a fresh high.
Non-Food inflation accelerated to 5.8% in May, up from 5.5% in April. This is above the 3-month average rate of 5.7%.
Food inflation decelerated to 15.4% in May, down from 15.7% in April. This is the same as the 3-month average rate of 15.4%, and is the second highest inflation rate in the food category on record.
Helen Dickinson, OBE, Chief Executive of the British Retail Consortium, said: “The slow in inflation was largely driven by lower energy and commodity costs starting to filter through to lower prices of some staples including butter, milk, fruit and fish. Conversely, the price of chocolate and coffee rose off the back of the ongoing high global costs for these commodities. While non-food inflation rose, consumers are benefitting from heavy discounts in footwear as well as books and home entertainment.”
“Fierce competition between supermarkets has helped keep British food among the cheapest of the large European economies. While there is reason to believe that food inflation might be peaking, it is vital that government does not hamper this early progress by piling more costs onto retailers and forcing up the cost of goods even further. The biggest risk comes from policies such as the incoming border checks and reforms to packaging recycling fees.”
Mike Watkins, Head of Retailer and Business Insight, NielsenIQ, said: “To help mitigate the impact of inflation, shoppers are saving money by looking for seasonal promotions on the high street and taking advantage of the price reductions offered by supermarket loyalty schemes. Food retailing in particular is competitive, so hopefully the recent price cuts in fresh foods is a sign that inflation has now peaked, albeit ambient inflation may take a little while longer to slow.”
