British Shoppers Enjoy Lower Food Prices
British shoppers experienced a welcome change last month as food prices dropped. Although the decrease was a modest 0.1% between August and September, it marked the first monthly fall in food prices since July 2021. This decline contributed to an overall decrease in retail inflation to 6.2%, the lowest it has been in a year, according to the British Retail Consortium (BRC).
Consumers will particularly benefit from the lower prices of dairy products, margarine, fish, and vegetables, which were the main drivers of the overall decrease. The BRC’s findings suggest that last month’s decision by the Bank of England to hold interest rates at 5.25% after 14 consecutive hikes was justified. The upcoming official inflation figures, set to be released next week, will likely support these findings.
While this news is favorable for consumers, grocers may not share the same enthusiasm. Helen Dickinson, CEO of the BRC, stated that “fierce competition” among retailers led to the decrease in prices. Supermarkets are already feeling the squeeze, with J Sainsbury’s EBITDA margin projected to decline from 6.9% to 6.7% in its current financial year, according to LSEG forecasts. A price war to attract financially stretched shoppers is the last thing grocers need.
The decline in food prices is a significant development for British shoppers, providing some relief to their wallets. However, it poses challenges for retailers who are grappling with increased competition and shrinking profit margins. As consumers eagerly await the official inflation figures, the impact of these lower food prices on the wider economy will become clearer.
More detail via Kitco.com here… ( Image via Kitco.com )
