Price rises in shops at lowest for nearly a year
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Vishala Sri-Pathma and Charlotte McDonald both collaborated to create this blog post.
Journalists who cover the business beat for the BBC News platform
Newly released data indicates that the pace of price increases in British retail establishments has decelerated to the lowest level seen since October. However, it is essential to note that despite this slowdown, the price hikes remain noteworthy.
According to the British Retail Consortium (BRC), there was a 6.9% increase in prices from August last year, exhibiting a decline from the 8.4% rise witnessed in July.
The cost of meat, potatoes, and cooking oil has experienced a relatively modest increase.
However, considering the uncertainty surrounding grain exports from Ukraine, it is improbable that there will be a significant deceleration in the increase of prices. Ukraine, responsible for nearly one-third of worldwide grain exports, plays a crucial role in this matter.
Until last month, Ukraine used to have an agreement with various nations, including Russia, which ensured the secure transport of grain. However, Russia has recently chosen to withdraw from this agreement, commonly referred to as the Black Sea Grain Initiative.
The BRC stated that the current situation, paired with India's choice to impose limitations on rice exports, suggests that there are now concerning signs of trouble ahead.
The team predicts a decline in the general inflation of food prices. However, they note that certain products such as vegetables and sunflower oil might experience a slight increase in prices due to the conclusion of the Black Sea Grain Initiative.
According to the British Retail Consortium (BRC), although the United Kingdom doesn't acquire significant quantities of wheat directly from Ukraine, it is anticipated that there will be a global escalation in wheat prices. This escalation, in turn, may consequently result in an upsurge in the cost of bread.
According to the information provided, it may take several months for changes in prices to be transferred from the beginning of the production process to the shelves of supermarkets.
The retail industry association also held responsible an increase in taxes imposed on alcoholic beverages.
According to Helen Dickinson, the CEO of BRC, the government's recent decision to raise alcohol taxes prevented the figures from being even lower.
According to her, certain components found in personal care products and beauty items have experienced a decline in cost, consequently alleviating the impact of price hikes within these specific categories.
On the other hand, the prices for clothing and shoes rose as the summer sales concluded.
According to Ms Dickinson, there are still challenges related to the supply chain that retailers need to overcome.
Rapidly escalating food costs have been significantly impacting families' finances for over a year.
In the month of July, the United Kingdom experienced an inflation rate of 6.4% overall. Nevertheless, the inflation rate specifically for food prices was recorded at 13.4%.
Although the percentage has decreased from its peak of 19.2% in March, Huw Pill, the chief economist at the Bank of England, stated earlier this month that the persistently high rates of inflation were "more enduring than initially anticipated."
He mentioned that there were some obstacles encountered while reducing it - particularly the conflict in Ukraine and the shipment of grain from the Black Sea region.
According to Mr. Pill, prices for specific commodities across the world were beginning to decline.
Nevertheless, he asserted that certain companies, "amidst the lack of clarity," had secured elevated prices at the onset of the conflict, resulting in increased prices on store shelves.
New findings from Which? indicate that trust among consumers in the grocery industry has plummeted to its lowest point since the notorious horsemeat controversy of 2013.
A middle-aged individual shared with the consumer organization: "If businesses boast about their excessive earnings, it clearly indicates that they are not fulfilling their promise of 'aiding the country during a time of financial struggle'."
Katie Alpin, the individual in charge of providing valuable insights at Which?, stated that the expense of the groceries purchased each week is equally concerning to millions of households, just like the costs associated with energy bills.
According to Andrew Opie, the BRC's leader for food and sustainability, the claim that shoppers do not feel satisfied with their purchases is "definitely false." He further stated that retailers prioritize consumers and their satisfaction with regards to food costs.
