Britain ‘over the worst’ of meals worth inflation

Britain’s cost-of-living disaster is lastly easing.

Food worth inflation is falling at an accelerated charge and producers’ costs are dropping for the primary time for the reason that pandemic.

At on-line grocery store Ocado’s half-year outcomes, founder and CEO Tim Steiner mentioned the UK is “definitely over the worst” of meals worth rises.

Data from market analysis group Kantar exhibits meals worth inflation dropped by 1.6 share factors to 14.9 per cent over the 4 weeks to July 9.

The earlier four-week interval noticed figures down 0.7 per cent to 16.5 per cent. At its March peak, costs soared at a file 17.5 per cent.

Fraser McKevitt, head of retail and shopper perception at Kantar, mentioned that whereas grocery worth inflation falling for the fourth month in a row was “good news for many households”, it was nonetheless “incredibly high”.

Spending on promotions elevated for the primary time in two years and now accounts for 1 / 4 of all gross sales.

Mr McKevitt mentioned that quite than concentrating on across-the-board worth cuts, supermarkets have been more and more providing offers by way of Clubcard, Nectar and different loyalty schemes.

At the identical time, Lloyds Banking Group mentioned foods and drinks producers decreased the costs they cost retailers and wholesalers for the primary time since February 2020, after falls in their very own prices.

Lloyds mentioned that the sector’s enter prices tracker fell from 49.4 in May to 45.7 in June. A rating above 50 signifies worth rises, a rating under factors to falls.

As a outcome, it mentioned that the costs tracker fell from 60 in May to 49.4 in June, which factors to the quantity being paid by retailers falling.

Annabel Finlay, managing director at Lloyds, mentioned: “Last month, we saw food and drink producers’ costs drop for the first time since 2016.

“This has continued into June and may give businesses the confidence and financial foundation they need to start reducing the prices they charge customers.

“This could be good news when it comes to the future direction of UK food price inflation. But it will likely be some time before any positive effect is seen on the prices at the till, and much could still change. In what are volatile conditions, there’s no guarantee that manufacturers’ input costs will keep falling.”

Which? Head of Food coverage Sue Davies mentioned that whereas it was good news that meals inflation was falling, costs have been “still devastatingly high for millions of people struggling to keep food on the table”.

William Woods, analyst at dealer Bernstein, warned that though costs have been coming down, “many core contributors to inflation are still feeding through, such as energy and labour costs”.