UK food prices dropped on the previous month for the first time in over two years due to “fierce competition” between retailers, an industry body has said.
The British Retail Consortium (BRC) said the price of an average food basket in September was down 0.1% on the previous month, marking the first monthly drop since July 2021.
The group added food inflation decelerated for the fifth consecutive month. It stood at an annual rate of 9.9% in September, down from 11.5% in August.
The BRC said last month’s drop in average food prices helped to reduce overall shop price inflation to 6.2% in September, down from 6.9% the previous month – the lowest annual rate since September 2022.
Helen Dickinson, chief executive of the BRC, said: “This [competition between retailers] brought year-on-year food inflation down to single digits and contributed to the fifth consecutive monthly fall in the headline rate, helped by easing cost pressures.
“Customers who bought dairy, margarine, fish and vegetables – all typically own-brand lines – will have found lower prices compared to last month.”
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Dickinson added that price rises were expected to continue to slow over the rest of the year.
“However, there are still many risks to this trend – high interest rates, climbing oil prices, global shortages of sugar, as well as the supply chain disruption from the war in Ukraine,” she added.
“Retailers will continue to do all they can to support their customers and bring prices down, especially as households face being squeezed by higher energy and mortgage bills.”
Last month, the UK government’s Office for National Statistics (ONS) said inflation in food and non-alcoholic beverage prices slowed to a 13.6% increase in August, on an annualised rate, compared to 14.9% in July.
The overall rate of inflation also fell, to 6.7% from 6.8% in July, aided by the slowdown in food price rises.