Shop price inflation edges up in August
Figures released by the British Retail Consortium have shown that shop price inflation edged up in August as food price inflation remained at its lowest level in nearly two years.
Shop price inflation increased marginally to 1.1% in August from 1.0% in July. Food inflation was unchanged at 3.1% in August. Deflation in non-food slowed to 0.1% from 0.3% in July.
Stephen Robertson, British Retail Consortium director general, said: “For all the talk of food prices erupting, August’s food inflation was no higher than the previous month’s two-year low of 3.1%. But, with price pressures from global commodities in the pipeline, this is likely to be food inflation bottoming out.”
The BRC warned that the price of products such as bread and pasta was now rising more quickly as a result of increasing wheat costs from poor harvests in the USA. However, it said that intense retail competition would continue to protect consumers from the worst effects of the rising costs.
Never Miss a Retail Update!Mike Watkins, senior manager, Retailer Services, Nielsen said: “It’s been a roller coaster year for inflation and we know that shoppers remain cautious and are probably more inclined to save than spend any small increase in household income. So, despite lower inflation in food, slight deflation in non-food and after one of the most intense periods of vouchering from supermarkets during the summer, retailers will now need to focus on limiting any price increases for the rest of the year, as underlying demand is still weak.”
