UK shop price inflation drops for fifth consecutive month

Inflation on fresh food eased by 1.3 per cent from a month earlier

Shoppers in London. Inflation on non-food items fell to 3.4 per cent from 4.4 per cent, its lowest since September 2022. PA
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Shop price inflation has dropped to its lowest rate since August 2022, figures show.

Easing for the fifth consecutive month, prices were 5.2 per cent higher in October than a year earlier, down from September’s 6.2 per cent, according to the British Retail Consortium-Nielsen Shop Price Index.

Due to a weaker pound, imported goods had higher levels of inflation, still-high producer costs and emerging trade frictions, while prices for some domestically produced food, such as fruit were lower compared with last month.

Prices of children’s and baby clothing also fell as retailers continued to support families with the arrival of colder weather, the BRC said.

Food inflation also slowed, to 8.8 per cent from September’s 9.9 per cent – its sixth consecutive deceleration and lowest rate since July – while fresh food inflation decreased even further to 8.3 per cent, down from 9.6 per cent a month earlier.

Inflation on non-food items fell to 3.4 per cent from 4.4 per cent, its lowest rate since September 2022.

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“Retailers have been battling to keep prices down for their customers in the face of rising transport costs, high interest rates and other input costs," BRC chief executive Helen Dickinson said.

“To keep inflation heading in the right direction, it is vital that the government does not burden businesses with unnecessary new costs.

“Without immediate action from the Chancellor, retailers have an additional £470 million ($571 million) a year on their business rates bill, jeopardising the progress made.

"Ultimately, it’s consumers who would pay the price for the rising rates bill.”

Mike Watkins, head of retailer and business insight at NielsenIQ, said: “Inflation has helped the topline sales growth of many food retailers this year but, in reality, shoppers have been paying more and buying less.

“And the rest of the retail trade has seen less benefit due to the continued squeeze on discretionary spend.

“This time last year, pressure was growing on household incomes as inflation was accelerating in fuel, energy and food so, as inflation continues to decelerate, we now need an uptick in sentiment to help retail sales over the next eight weeks.”

Updated: October 31, 2023, 12:01 AM