Food inflation falls but trust in supermarkets at lowest point for 10 years
The rate of food inflation slowed down in August according to data from a trade association, but shoppers are losing faith in the supermarket sector.
Figures from the British Retail Consortium (BRC) show the rate of inflation fell from 13.4% to 11.5% in July – the lowest its been since September 2022.
In promising news for shoppers, the shop price index found fresh food inflation dropped to 11.6%, down from 14.3% in the previous month and below the three-month average of 13.8%.
Inflation for food stored at room temperature, known as ambient food, also eased to 11.3% in August, compared to 12.3% in July.
Due to the steady drop, overall shop price inflation decreased to 6.9% from 7.6% too.
‘Better news for consumers’
Helen Dickinson, chief executive of the BRC, said: “[This is] better news for consumers as shop price inflation in August eased to its lowest level since October 2022. This was driven by falling food inflation, particularly for products such as meat, potatoes and some cooking oils. These figures would have been lower still had the Government not increased alcohol duties earlier this month.
“Across Non-Food categories, toiletries and cosmetics saw price growth ease as many key components became cheaper, meanwhile inflation for clothing and footwear increased as retailers unwound their extensive summer sales. While inflation is on course to continue to fall thanks to retailers’ efforts, there are supply chain risks for retailers to navigate.”
She added: “Russia’s withdrawal from the Black Sea Grain Initiative and its targeting of Ukrainian grain facilities, as well as poor harvests across Europe and beyond, could serve as potential roadblocks to lower inflation. A potential £400m hike to business rates bills from next April would certainly jeopardise efforts to tackle inflation unless the Chancellor intervenes.”
Trust in supermarkets at lowest levels in a decade
Despite the drop in food inflation, a survey by Which? revealed that shoppers’ trust in supermarkets has fallen to its lowest level since the horse meat scandal 10 years ago, where DNA from the animal was found in some meat products.
When asked by the consumer champion if they believed supermarkets acted in their best interest, less than half of the 2,000 respondents believed they did, and around one in five did not trust the sector at all, its monthly study found.
Shoppers gave the grocery sector a confidence score of just +30 (on a scale of -100 to +100). This was the lowest since February 2013. At that point, shoppers’ confidence in the grocery sector dropped to its lowest ever recorded at +24.
In contrast, at the start of the pandemic in May 2020, when supermarkets were widely praised for ramping up online deliveries, confidence was +68.
According to Which?, one potential reason for the drop in confidence comes from the lack of available budget range items on offer in supermarket convenience stores.
Katie Alpin, head of strategic insight at Which?, said: “Supermarkets have the power to ease the huge pressure faced by shoppers, especially families and those on low incomes, by putting budget range items in hundreds of more expensive convenience stores. Which? research has found that these stores rarely, if ever, stock the cheapest products.”