Shop price inflation has slowed to its lowest level in close to three years, but geopolitical tensions and the knock-on impact on commodity prices, like oil, “pose a threat to future price stability”, a report has warned.
According to the latest reading from the British Retail Consortium (BRC), annual shop price inflation eased to 0.8 per cent in April, down from 1.3 per cent in March.
This is below the three-month average rate of 1.4 per cent and the lowest since December 2021.
Food inflation also decelerated to 3.4 per cent in April, down slightly from 3.7 per cent recorded the prior month. The figure is now the lowest since March 2022.
April’s decline does not mean food prices are decreasing; it means the rate at which they are rising has slowed.
The overall price of food and non-alcoholic beverages rose around 25 per cent between January 2022 and January 2024.
This is because prices at the till skyrocketed in the aftermath of Russia’s invasion of Ukraine and several poor harvests.
These pressures have shown signs of abating in the last few months, helped by supermarkets ramping up discounts and the annual inflation rate slowing to 3.4 per cent last month.
However, Helen Dickinson, chief of the British Retail Consortium (BRC) said: “Geoopolitical tensions and the knock-on impact on commodity prices, like oil, pose a threat to future price stability.
“Retailers will continue to do all they can to keep prices down, but government has a role to play with pro-growth policies that allow businesses to invest in the customer offer.”
This week a report by the Energy and Climate Intelligence Unit (ECIU), also said the price of bread and biscuits may rise this year due to unseasonably wet weather.
Harvests of wheat, barley and oats may fall by 17 per cent compared to last year.
Mike Watkins, head of retailer and business insight, NielsenIQ, added: “Whilst topline retail growth has slowed since in recent weeks as food inflation has fallen, it is good news for shoppers that the cost of their grocery shop is starting to stabilise and that the prices of many non-food goods are now cheaper than a year ago.
“To help shoppers manage household budgets, retailers continue to promote and this provides further savings and we expect this to continue to help drive overall demand.”