Food inflation slowed to 2.2% in July as shoppers benefitted from a slew of promotions across stores, according to new figures from the British Retail Consortium (BRC).
Retailers were especially keen to capture shoppers during the World Cup, launching numerous deals on snacks and booze, the BRC said.
It means food inflation has now held at less than 5% for around two years after peaking at around 15% in 2023.
It is primarily driven by fresh food prices – up 3.1% on last year – while ambient food prices rose just 1.1%.
But BRC CEO Helen Dickinson warned that while the figures are encouraging, growing cost pressures remain on the horizon.
“Higher employment costs and packaging taxes, global instability and climate-related disruption all make it more expensive to get products onto shelves,” she said.
“The best way to keep the cost of living down is to keep the cost of doing business down. Cutting unnecessary taxes and levies on energy bills would help retailers keep prices low, invest locally and support jobs in every town and city.”
Overall shop price inflation fell to 0.9% in July, dragged lower by non-food goods which saw just a 0.2% rise in price.
Clothing and footwear retailers offered significant discounts as they started clearing summer stock, Dickinson said, although some categories like electricals and health & beauty saw higher inflation as rising chip prices and manufacturing costs fed through.
Mike Watkins, head of retailer and business insight at NIQ, said “we can expect promotions to continue to be an important part of driving demand for the rest of the summer”.
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