In September, the cost of groceries in the UK saw a marginal decrease of 0.1% compared to the previous month, as reported by the British Retail Consortium (BRC). The BRC noted that prices had been reduced for items like dairy, margarine, fish, and vegetables, while households spent less on school uniforms and back-to-school essentials.
The BRC also confirmed a slowdown in food inflation to 9.9% in September, down from 11.5% in August. This rate is below the 3-month average of 11.4% and marks the fifth consecutive deceleration in the food category. Meanwhile, overall shop price annual inflation, encompassing non-food items, also eased to 6.2% in September, down from 6.9% in August.
It's essential to clarify that decelerating inflation means that prices are still increasing but at a slower pace. Consequently, in September, shoppers paid around 10% more for their goods compared to the same period last year. The reported 0.1% price decline was assessed on a month-to-month basis, rather than an annual difference.
The BRC anticipates a continued decrease in shop price inflation for the remainder of the year, but it highlights potential factors that could disrupt this trend. Notable risks include elevated interest rates, surging oil prices, global sugar shortages, and supply chain disruptions due to Russia's conflict in Ukraine.