Grocery Rivalry Triggers First Food Price Dip in Two Years, Predicts BRC

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A heated rivalry among grocery chains has prompted the first monthly dip in food costs for over a twenty-four month period, as reported by an industry organization. The British Retail Consortium (BRC) revealed a 0.1% decrease in prices for the month of September compared to the preceding month.

Several commodities including dairy products, margarine, fish, and vegetables – prominent in the private-label category – experienced price reductions. While the annual progression of food price increments, known as grocery inflation, remains elevated, it is on a downward incline.

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According to the BRC, last year’s food prices marked a 9.9% increase up until September, which is a slight decrease from August’s soaring rate of 11.5%. The comprehensive store price inflation, inclusive of non-food items, descended to an annual low of 6.2% the previous month.

The BRC also cited that price slashes on educational uniforms and similar back-to-school products provided some financial relief for families. However, declines in the inflation rate should not be misconstrued as a reduction in prices, it merely indicates a slower price increment pace.

Helen Dickinson, the BRC’s chief executive, predicted a continuous deceleration in price hikes for the remainder of the year. Yet, she warned against several potential threats to this trend, such as high-interest rates, escalating oil prices, global sugar deficits, and the disruption in the supply chain due to the conflict in Ukraine.

In a conversation with BBC’s Today program, Rachel Kettlewell, Founder of Fearne & Rosie Jam, observed some easing in the costs her company bore. The firm, a supplier to supermarkets like Waitrose, Morrisons, and Booths, needed to substitute raspberries in one of their offering due to escalating costs.

Now, with the newfound decline of a primary ingredient’s cost, the company is initiating dialogues with retailers about potential alterations in pricing and product offerings. She clarified that their products comprise numerous components, each with differing price tendencies, which complicate the assumption of an end-product becoming cheaper with a cost dip in one area.

Mike Watkins from NielsenIQ, a collaborator with the BRC to release the store price index, noted that despite recent price reductions by supermarkets, there’s still a strain on budgets with a majority of households feeling a significant impact from the persistent increase in the cost of living.

The BRC’s revelations mirror the recent official inflation report indicating that decelerating food costs contributed to an unexpected inflation dip in August. This slowdown in the inflation rate led the Bank of England to maintain interest rates at their previous month’s meeting. The interest rate capped at 5.25%, ending a fourteen-consecutive increment streak by the Bank in its bid to regulate inflation.

Bank governor Andrew Bailey projected an ongoing fall in inflation and stated there were “increasing signs” that the higher rates were having a detrimental effect on the economy.

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Melinda Cochrane is a poet, teacher and fiction author. She is also the editor and publisher of The Inspired Heart, a collection of international writers. Melinda also runs a publishing company, Melinda Cochrane International books for aspiring writers, based out Montreal, Quebec. Her publication credits include: The art of poetic inquiry, (Backalong Books), a novella, Desperate Freedom, (Brian Wrixon Books Canada), and 2 collections of poetry; The Man Who Stole Father’s Boat, (Backalong Books), and She’s an Island Poet, Desperate Freedom was on the bestseller's list for one week, and The Man Who Stole Father’s Boat is one of hope and encouragement for all those living in the social welfare system. She’s been published in online magazines such as, (regular writer for) ‘Life as a Human’, and Shannon Grissom’s magazine.