Food prices have continued to rise at a slower pace in November but the British Retail Consortium warned a new raft of higher costs hitting business could derail falling inflation in 2024.
Helen Dickinson, the CEO of the trade body, said increases in business rates and higher labour costs could stall progress in bringing down inflation.
“Retailers are committed to delivering an affordable Christmas for their customers,” she added.
“They face new headwinds in 2024 - from government-imposed increases in business rates bills, to the hidden costs of complying with new regulations. Combining these with the biggest rise to the National Living Wage on record will likely stall or even reverse progress made thus far on bringing down inflation, particularly in food.”
Food inflation decelerated to 7.8% in November, down from 8.8% in October, according to the latest BRC-NielsenIQ shop price index.
Fresh food inflation slowed further to 6.7%, down from 8.3% in October, to the lowest level since June 2022.
Ambient food inflation decelerated to 9.2% in November, down from 9.5% in the prior month and the lowest since October 2022.
Non-food inflation fell to 2.5% in November, down from 3.4% in October, and overall shop price inflation eased from 5.2% to 4.3%.
“Shop price inflation eased for the sixth month in a row as retailers competed fiercely to bring prices down for customers ahead of Christmas,” Dickinson said.
“Food inflation eased, thanks to lower domestic energy prices reducing overall input costs, particularly for dairy products. Ambient food inflation slowed but remained higher than fresh food due to a larger proportion of goods being imported to the UK and impacted by the weak pound. While health and beauty products saw price cuts as retailers rush to shift stock before Christmas, clothing prices increased as some retailers continued to hold off on promotional activity.”