Shop price inflation slows further in January
By Josh White
Date: Tuesday 30 Jan 2024
(Sharecast News) - Shop price inflation saw a notable slowdown at the start of the year, according to fresh data released on Tuesday, as price growth reached its lowest level since May 2022.
The British Retail Consortium (BRC) and NielsenIQ shop price index for 1 January to 7 January showed a significant drop in annual shop price inflation to 2.9%, from 4.3% in December.
Within the index, non-food inflation saw a substantial decrease, falling to 1.3% in January from 3.1% in December.
That marked a sharp drop below the three-month average rate of 2.4%, and positioned non-food inflation at its lowest point since February 2022.
Food inflation experienced a deceleration as well, declining to 6.1% in January from 6.7% in December.
The reduction in food inflation was part of a consistent trend, with January marking the ninth consecutive month of deceleration in the category.
It also brought food inflation to its lowest level since June 2022.
"Some New Year cheer as January shop price inflation slid to its lowest level since May 2022," said British Retail Consortium chief executive officer Helen Dickinson.
"Non-food goods drove the fall, as many retailers offered heavily discounted goods in their January sales to entice consumer spend amidst weak demand.
"Good news for the morning brew as the price of tea and milk fell, while evening tipples remained more expensive on the back of increased alcohol duties."
Looking at the specific fresh food and ambient food categories, both also demonstrated notable declines in inflation rates.
Fresh food inflation slowed to 4.9% in January from 5.4% in December, with that rate being below the three-month average of 5.6%.
Similarly, ambient food inflation decelerated from 8.4% in December to 7.7% in January, falling below the three-month average rate of 8.5%.
The current ambient food inflation rate represented the lowest level recorded since July 2022.
"Retailers have spent the last eight months working to bring down inflation, but progress will likely be hampered by new cost pressures coming direct from government - including implementing the increase in the National Living Wage on top of an above inflation rise in business rates this April, a potential new grocer 'surtax' in Scotland, and ill-conceived recycling proposals," Helen Dickinson added.
"Rising geopolitical tensions will also add to uncertainty and costs in supply chains.
"With a general election later this year, we want to see political parties outline how they will help unlock investment across the country rather than the current trajectory which is doing just the opposite."
Reporting by Josh White for Sharecast.com.
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