U.K. retail food price inflation slowed to 2.7% in August from 2.8% in July; competition among retailers continuing to shield consumers from full effects of food inflation: British Retail Consortium

Cindy Allen

LONDON , September 7, 2011 (British Retail Consortium) – Overall shop price inflation slowed to 2.7% in August from 2.8% in July. Food inflation slowed to 5.0% in August from 5.2% in July. Non-food inflation increased to 1.4% in August from 1.3% in July.

Stephen Robertson, British Retail Consortium Director General, said:
"This is a modest piece of good news for hard-pressed households. For the second month in a row a fall in overall shop price inflation can be put down to food inflation slowing. Global commodities, such as wheat, have dropped from the peaks they reached earlier in the year, though costs remain high. And good harvests of fresh fruit and vegetables such as apples, plums and corn-on-the-cob have also helped keep food prices down.

"Competition between retailers continues to protect consumers from the full impact of food inflation. Nearly 40 per cent of all groceries going through the tills are on some sort of promotion or special offer, meaning savvy shoppers can reduce the impact of price rises on their own budgets by picking the deals that work best for them.

"There has been a small rise in non-food inflation but it remains well below the level that could be expected following January's VAT rise. Retailers of big-ticket items in particular are dependent on high levels of discounting to make sales, keeping prices down for customers."

Mike Watkins, Senior Manager, Retailer Services, Nielsen comments:

"With consumer confidence at levels that we last saw at the start of the recession three years ago, retailers have maintained the historically high levels of promotions and this is helping the many households with stretched budgets to save money. The good news for shoppers is that many high street and non-food retailers have been holding back on price increases during the summer and, for the second month running, food inflation has slowed at supermarkets."

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