Yahoo Finance UK shop inflation drops amid cheaper tea and milk prices
January shop inflation dropped to its lowest levels in almost a year as the price of tea and milk fell and retailers offered heavy discounts to entice customers.
January’s shop prices eased to 2.9% higher than a year ago, down from 4.3% in December, according to the British Retail Consortium (BRC)-NielsenIQ Shop Price Index. This is the lowest since May 2022.
The BRC said the easing is “good news for the morning brew” as the price of tea and milk fell, while alcohol remained more expensive on the back of increased duties.
Fresh food inflation slowed further to 4.9%, down from 5.4% a month earlier.
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Inflation on non-food products fell to 1.3% in January, down from 3.1% in December – the lowest rate since February 2022.
Food inflation also slowed, to 6.1% in January from December’s 6.7%, the ninth consecutive fall and the lowest rate since June 2022.
BRC chief executive Helen Dickinson said: “Some new year cheer as January shop price inflation slid to its lowest level since May 2022.
“Non-food goods drove the fall, as many retailers offered heavily discounted goods in their January sales to entice consumer spend amidst weak demand.
“Rising geopolitical tensions will also add to uncertainty and costs in supply chains.”
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Mike Watkins, head of retailer and business insight at NielsenIQ, said: “Shoppers are seeing savings at the checkout, with non-food retailers on promotion and food retailers continuing to reduce prices when the costs of goods fall.
“However, consumer demand remains fragile as most households are yet to feel better off after nearly two years of inflation.”
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