Price inflation likely to have peaked

Period Covered: 01 – 07 April 2023

• Shop Price annual inflation decelerated to 8.8% in April, down slightly from 8.9% in March. This is above the 3-month average rate of 8.7%. Shop price growth remains near record-highs.

• Non-Food inflation decelerated to 5.5% in April, down from 5.9% in March. This is below the 3-month average rate of 5.6%. Inflation remains elevated in this category.

• Food inflation accelerated to 15.7% in April, up from 15.0% in March. This is above the 3-month average rate of 15.1%, and is the highest inflation rate in the food category on record.

• Fresh Food inflation accelerated in April, to 17.8%, up from 17.0% in March. This is above the 3-month average rate of 17.0% and is the highest inflation rate in the fresh food category on record.

• Ambient Food inflation accelerated to 12.9% in April, up from 12.4% in March. This is above the 3-month average rate of 12.5% and is the fastest rate of increase in the ambient food category on record.

Helen Dickinson, OBE, Chief Executive of the British Retail Consortium, said:

“Overall shop price inflation eased slightly in April due to heavy Spring discounting in clothing, footwear, and furniture. However, food prices remained elevated given ongoing cost pressures throughout supply chain. The knock-on effect from increased production and packaging costs meant that ready meals became more expensive and coffee prices were also up due to the high cost of coffee beans, as well as key producer nations exporting less. Meanwhile, the price of butter and vegetable oils started to come down as retailers passed on cost savings from further up the supply chain.

“We should start to see food prices come down in the coming months as the cut to wholesale prices and other cost pressures filter through. In the meantime, retailers remain committed to helping their customers and keeping prices as low as possible. Government must also help by minimising the impact of oncoming regulatory burdens as these will hold back investment and ultimately contribute to ongoing high prices for already-squeezed households.”

Mike Watkins, Head of Retailer and Business Insight, NielsenIQ, said:

“In recent weeks, more retailers have used loyalty schemes or money off promotions to help stimulate sales. However, with inflation yet to peak and sales volumes in decline in many channels, it’s difficult to second guess the strength of consumer confidence. Given the falls in disposable income we really need to see CPI back into single figures and a slowdown in food inflation to test shoppers` willingness to spend.”