Food prices rising at slowest rate for two years amid easing energy and fertiliser costs

Food inflation has slowed to its lowest rate since May 2022 amid easing energy and fertiliser costs and fierce competition among retailers, figures have revealed.

Food prices were 5 per cent higher than a year ago in February – a marked drop from January’s 6.1 per cent and below the three- month average of 6 per cent, according to data from the British Retail Consortium (BRC)-Nielsen Shop Price Index.

Price drops for meat, fish and fruit helped to drive a slowing of fresh food inflation to 3.4 per cent from January’s 4.9 per cent, well below the three-month average of 4.6 per cent and the lowest since February 2022. 

Overall shop price inflation eased to 2.5 per cent, down from January’s 2.9 per cent, its lowest rate since March 2022.

Easing inflation: Food prices were 5% higher than a year ago in February, a marked drop from January’s 6.1% and below the three-month average of 6%

Inflation on products other than food remained unchanged at 1.3 per cent, balanced by the price of furniture, electricals and health and beauty products rising, while clothing fell as many retailers kept promotions in place to encourage spending.

BRC chief executive Helen Dickinson said: ‘There was good news for consumers as shop price inflation fell to its lowest rate in nearly two years.

‘Easing supply chain pressures have begun to feed through to food prices, but significant uncertainties remain as geopolitical tensions rise.’

Mike Watkins, head of retailer and business insight at data provider Nielsen IQ, said ‘the underlying trend in prices will be downwards over the next few months’.

He added: ‘Since the start of the year, food retailers in particular have reduced prices.’