Are Food Prices Going Down?
- Food prices have finally slowed down
- Rapid inflation on food was caused by falling value of the Pound
- Respite for customers when other bills are rising
There has been a substantial slowdown in food price inflation, which has been a welcome respite for consumers.
The impact of the Pound’s depreciation one year on has begun to fade, figures show.
Shop price deflation accelerated to 1% in March, driven by the lowest rate of food inflation for a year, according to the BRC-Nielsen Shop Price Index.
Food inflation took a significant fall as well, going down from 1.6% to 0.4%.
Prices of fresh food increased by 0.3% in March, a slowdown from the 0.9% rise recorded in February, the lowest rate of inflation since March last year.
Meanwhile, ambient food prices increased by 0.6% in March after rising by 2.5% just the month before.
Deflation in non-food prices also eased in March, to a rate of 1.9% compared with February’s 2.2%.
Helen Dickinson, British Retail Consortium chief executive, said, “As the impact of the Pound’s depreciation one year on are beginning to fizzle out, retailers are passing the positive impact though to the shop floor.
“So some welcome respite for consumers, particularly with the gap between inflation and wage growth finally narrowing.
“But with further wage increases on the horizon putting upward pressure on prices, consumers will continue to feel the grip on their spending power.”
What Does This Mean For You?
This should mean that the price of food for supermarkets will go down, and they will pass the savings on to the customer.
Mike Watkins, head of retailer and business insight at Nielsen, said, “With inflationary pressure receding in the food supply chain, we can now expect supermarkets to focus on lowering prices and to use promotions to drive visits as part of the battle for gaining share of wallet.”
Earlier in the year, Co-Op announced it was putting its prices down but an average of 14%, so with food prices no longer being hit by inflation as hard, other supermarkets may follow suit.
Do you think food prices will actually go down? Let us know in the comments.