Food inflation slowed significantly in the past month, with strong crops of seasonal vegetables helping to ease the burden on under-pressure on consumers.
Year-on-year inflation fell from 5.7% in June to 5.2% last month, according to new data from Nielsen. The drop was the main factor behind a reduction in overall shop inflation from 2.9% to 2.8%.
“Good crops of seasonal fresh fruit and vegetables boosting supplies and cheaper animal feed easing the pressure on meat prices were the prime reasons food inflation fell,” said Stephen Robertson of the Britain Retail Consortium.
He added: “People are increasingly taking advantage of promotions to help mitigate against the full impact of inflation, so the effect of food inflation faced by consumers will be less than 5.2%.”
Thirty-nine per cent of groceries sold in the supermarkets currently on promotion.
Analysts said food inflation may now have peaked.
“Gauging the outlook for food inflation is becoming a little misty at present but we sense that a peak may have passed,” said Clive Black of Shore Capital. “While we expect food inflation to persist for some time to come, there are one or two signs that lead us to expect the upward pressure to ease.”
He said early indicators about harvests were “encouraging, certainly more so than was the case at Easter”, while Russia’s return to exporting would also ease upward pressure on prices.
Although the figures did not represent “the end of the tunnel”, Black said “the tunnel may be in sight from an input pressure perspective” for retailers and consumers alike.
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