Food inflation expected to dip after record highs
Food prices should begin to fall
Food inflation hit a record high last month but analysts offered consumers some hope that it may have peaked.
Prices rose because of the surging cost of raw material and packaging, according to the British Retail Consortium (BRC).
Food inflation accelerated to 15.7% in April, up from 15.% in March and the highest inflation rate in the food category on record. Fresh Food inflation rose even more, up by 17.8%, up from 17% in March and is also the highest reading.
Helen Dickinson, chief executive of the BRC, said surging input costs were to blame, but she is optimistic that food prices should begin falling.
“We should start to see food prices come down in the coming months as the cut to wholesale prices and other cost pressures filter through,” she said.
“In the meantime, retailers remain committed to helping their customers and keeping prices as low as possible. Government must also help by minimising the impact of oncoming regulatory burdens as these will hold back investment and ultimately contribute to ongoing high prices for already-squeezed households.”
Overall shop price inflation dipped to 8.8%, down slightly from 8.9% in March, although it remained at near-record highs. Non-food inflation edged down to 5.5% in April, from 5.9%in March.
Mike Watkins, head of retailer and business insight at NielsonIQ, said that retailers had been using loyalty schemes and money-off promotions in recent weeks “to help stimulate sales”.
He added that “given the falls in disposable income we really need to see the consumer price index (CPI) back into single figures and a slowdown in food inflation to test shoppers’ willingness to spend”.